Date: March 30, 2005 and as joint and several borrowers - and - SCOTIABANK EUROPE PLC as Lender
Date:
March 30, 2005
MC
IBIS SHIPPING LIMITED
and
MC
EID SHIPPING LIMITED
as
joint
and several borrowers
-
and
-
SCOTIABANK
EUROPE PLC
as
Lender
relating
to
a
loan
facility of up to US$68,000,000
to
finance part of the acquisition costs of the
LPG
carriers “XXXXX XXXX”
and
“XXXXX XXXXXXXX”
INDEX
|
Page
|
|||
|
1
|
INTERPRETATION
|
1
|
|
|
2
|
FACILITY
|
12
|
|
|
3
|
DRAWDOWN
|
12
|
|
|
4
|
INTEREST
AND TRANSACTIONS
|
13
|
|
|
5
|
INTEREST
PERIODS
|
15
|
|
|
6
|
DEFAULT
INTEREST
|
16
|
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
17
|
|
|
8
|
CONDITIONS
PRECEDENT
|
19
|
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
19
|
|
|
10
|
GENERAL
UNDERTAKINGS
|
21
|
|
|
11
|
CORPORATE
UNDERTAKINGS
|
23
|
|
|
12
|
INSURANCE
|
24
|
|
|
13
|
SHIP
COVENANTS
|
28
|
|
|
14
|
SECURITY
COVER
|
32
|
|
|
15
|
PAYMENTS
AND CALCULATIONS
|
33
|
|
|
16
|
APPLICATION
OF RECEIPTS
|
34
|
|
|
17
|
APPLICATION
OF EARNINGS
|
34
|
|
|
18
|
EVENTS
OF DEFAULT
|
35
|
|
|
19
|
FEES
AND EXPENSES
|
39
|
|
|
20
|
INDEMNITIES
|
40
|
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
42
|
|
|
22
|
ILLEGALITY,
ETC
|
43
|
|
|
23
|
INCREASED
COSTS
|
43
|
|
|
24
|
SET
OFF
|
45
|
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICE
|
45
|
|
|
26
|
VARIATIONS
AND WAIVERS
|
46
|
|
|
27
|
NOTICES
|
46
|
|
|
|
|||
|
28
|
JOINT
AND SEVERAL LIABILITY
|
48
|
|
|
|
|||
|
29
|
SUPPLEMENTAL
|
49
|
|
|
|
|||
|
30
|
LAW
AND JURISDICTION
|
49
|
|
|
|
|||
|
SCHEDULE
1 DRAWDOWN NOTICE
|
51
|
||
|
SCHEDULE
2 CONDITION PRECEDENT DOCUMENTS
|
52
|
||
|
EXECUTION
PAGE
|
54
|
||
THIS
AGREEMENT is
made
on March
2005
BETWEEN
|
(1)
|
MC
IBIS SHIPPING LIMITED and
MC EID SHIPPING LIMITED as
joint and several borrowers; and
|
|
(2)
|
SCOTIABANK
EUROPE PLC,
acting through its office at Scotia House, 00 Xxxxxxxx Xxxxxx, Xxxxxx
XX0X
0XX, Xxxxxxx (the “Lender”).
|
BACKGROUND
|
(A)
|
The
Lender has agreed to make available to the Borrowers a facility of
up to
$68,000,000 in 2 advances, Advance A and Advance B (each as defined
below). Advance A shall be used for the purpose of financing the
acquisition of the 1987 built 77,749 cu.m LPG carrier “XXXXX XXXX” to be
purchased by IBIS and Advance B shall be used for the purpose of
financing
the 1991 built 75,353 cu.m LPG carrier “XXXXX XXXXXXXX” to be purchased by
EID.
|
|
(B)
|
The
Lender may enter into interest rate swap transactions with the Borrowers
from time to time to hedge the Borrowers’ exposure under this Agreement to
interest rate fluctuations.
|
IT
IS AGREED
as
follows:
|
1
|
INTERPRETATION
|
|
1.1
|
Definitions.
Subject to Clause 1.5,
in this Agreement:
|
“Accounts
Security Deed”
means a
deed creating security in respect of the Earnings Accounts and the Retention
Accounts in such form as the Lender may require;
“Advance
A”
means
the principal amount of the first borrowing by the Borrowers under this
Agreement;
“Advance
A Master Agreement”
means
a
master
agreement (on the 1992 ISDA (Multicurrency-Crossborder) form) made or to be
made
between the Lender and IBIS in such form as the Lender may require, and includes
all Transactions from time to time entered into and Confirmations from time
to
time exchanged under that master agreement;
“Advance
A Master Agreement Liabilities”
means
all liabilities which IBIS has, at the date of
this
Agreement or at any later time or times, under or by virtue of the Advance
A
Master Agreement or any judgment relating to the Advance A Master Agreement;
and
for this purpose, there shall be disregarded any total or partial discharge
of
these liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other procedure
under the insolvency laws of any country;
“Advance
B”
means
the principal amount of the second borrowing by the Borrowers under this
Agreement;
“Advance
B Master Agreement”means
a
the master agreement (on the 1992 ISDA (Multicurrency Crossborder) form) made
or
to be made between the Lender and EID in such form as the Lender may require,
and includes all Transactions from time to time entered into and Confirmations
from time to time exchanged under that master agreement;
“Advance
B Master Agreement Liabilities”
means
all liabilities which EID has, at the date of
this
Agreement or at any later time or times, under or by virtue of the Advance
B
Master Agreement or any judgment relating to the Advance B Master Agreement;
and
for this purpose, there shall be disregarded any total or partial discharge
of
these liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other procedure
under the insolvency laws of any country;
“Advances”
means
Advance A and Advance B;
“Approved
Manager”
means,
in relation to a Ship and with respect to its technical management, V
Ships
Group Ltd. or any
other
company which the Lender may approve from time to time as the technical manager
of the Ship;
“Availability
Period”
means
the period commencing on the date of this Agreement and ending on:
|
(a)
|
the
date falling 3 months after the date of the Commitment Letter (or
such
later date as the Lender may agree with the Borrowers);
or
|
|
(b)
|
if
earlier, the second Drawdown Date or the date on which the Commitment
is
fully borrowed, cancelled or
terminated;
|
“Borrowers”
means
EID and IBIS;
“Business
Day”
means a
day on which banks are open in London and, in respect of a day on which a
payment is required to be made under a Finance Document, also in New York
City;
“Commitment”
means
$68,000,000 as that amount may be reduced, cancelled or terminated in accordance
with this Agreement;
“Commitment
Letter”
means
a
letter
dated 4 March 2005 addressed by Lender to the Borrowers and setting out the
terms on which the Commitment is to be made available and in which such terms
are acknowledged and agreed by the Borrowers;
“Confirmation”
has the
meaning given in the Master Agreement to which that confirmation
relates;
“Contractual
Currency”
has the
meaning given in Clause 20.4;
“Deed
of Covenant”
means,
in relation to a Ship, a deed of covenant collateral to the Mortgage on the
Ship
and creating charges over the Ship, its Earnings, its Insurances and any
Requisition Compensation in such form as the Lender may require;
“Dollars”
and
“$”
means
the lawful currency for the time being of the United States of
America;
“Drawdown
Date”
means,
in relation to an Advance, the date requested by the Borrowers for the Advance
to be made, or (as the context requires) the date on which the Advance is
actually made;
“Drawdown
Notice”
means a
notice in the form set out in Schedule 1 (or in any other form which the Lender
requires);
“Earnings”
means,
in relation to a Ship, all moneys whatsoever which are now, or later become,
payable (actually or contingently) to the Borrower owning the Ship and which
arise out of the use or operation of the Ship, including (but not limited
to):
|
(a)
|
all
freight, hire and passage moneys, compensation payable to that Borrower
in
the event of requisition of the Ship for hire, remuneration for salvage
and towage services, demurrage and detention moneys and damages for
breach
(or payments for variation or termination) of any charterparty or
other
contract for the employment of the
Ship;
|
|
(b)
|
all
moneys which are at any time payable under Insurances relating to
the Ship
in respect of loss of earnings; and
|
|
(c)
|
if
and whenever the Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) are pooled or shared with any other
person,
that proportion of the net receipts of the relevant pooling or sharing
arrangement which is attributable to the
Ship;
|
“Earnings
Account”means,
in
relation to a Ship, an account in the name of the Borrower owning the Ship
with
the Lender in London designated “[Name of Borrower] - Earnings Account”, or any
other account (with that or another office of the Lender or with a bank or
financial institution other than the Lender) which is designated by the Lender
as the Earnings Account in relation to the Ship for the purposes of this
Agreement;
“EID”
means
MC Eid Shipping Limited, a company incorporated in The Commonwealth of the
Bahamas whose registered office is at 0 Xxxxxx Xxxxxx, Xxxxxx House, Nassau,
Bahamas;
“Environmental
Claim”
means:
|
(a)
|
any
claim by any governmental, judicial or regulatory authority which
arises
out of an Environmental Incident or an alleged Environmental Incident
or
which relates to any Environmental Law;
or
|
|
(b)
|
any
claim by any other person which relates to an Environmental Incident
or to
an alleged Environmental Incident,
|
and
“claim”
means a
claim for damages, compensation, fines, penalties or any other payment of any
kind, whether or not similar to the foregoing; an order or direction to take,
or
not to take, certain action or to desist from or suspend certain action; and
any
form of enforcement or regulatory action, including the arrest or attachment
of
any asset;
“Environmental
Incident”
means
in relation to a Ship:
|
(a)
|
any
release of Environmentally Sensitive Material from the Ship;
or
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released
from a
vessel other than the Ship and which involves a collision between
the Ship
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the Ship is actually or
potentially liable to be arrested, attached, detained or injuncted
and/or
the Ship and/or the Borrower owning the Ship and/or any operator
or
manager of the Ship is at fault or allegedly at fault or otherwise
liable
to any legal or administrative action;
or
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from the Ship and in connection with which the Ship
is
actually or potentially liable to be arrested and/or where the Borrower
owning the Ship and/or any operator or manager of the Ship is at
fault or
allegedly at fault or otherwise liable to any legal or administrative
action;
|
“Environmental
Law”
means
any law relating to pollution or protection of the environment, to the carriage
of Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
“Environmentally
Sensitive Material”
means
oil, oil products and any other substance (including any chemical, gas or other
hazardous or noxious substance) which is (or is capable of being or becoming)
polluting, toxic or hazardous;
“Event
of Default”
means
any of the events or circumstances described in Clause 18.1;
“Finance
Documents”
means:
|
(a)
|
this
Agreement;
|
|
(b)
|
the
Guarantee;
|
|
(c)
|
the
Mortgages;
|
|
(d)
|
the
Deeds of Covenants;
|
|
(e)
|
the
Accounts Security Deed;
|
|
(f)
|
the
Master Agreement Security Deeds;
|
|
(g)
|
the
Manager’s Letters of Undertaking;
and
|
|
(h)
|
any
other document (whether creating a Security Interest or not) which
is
executed at any time by a Borrower or any other person as security
for, or
to establish any form of subordination or priorities arrangement
in
relation to, any amount payable to the Lender under this Agreement
or any
of the other documents referred to in this
definition;
|
“Financial
Indebtedness”
means,
in relation to a person (the “debtor”),
a
liability of the debtor:
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
|
|
(b)
|
under
any loan stock, bond, note or other security issued by the
debtor;
|
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
|
|
(d)
|
under
a financial lease, a deferred purchase consideration arrangement
or any
other agreement having the commercial effect of a borrowing or raising
of
money by the debtor;
|
|
(e)
|
under
any foreign exchange transaction, any interest or currency
swap or
any other kind of derivative transaction entered into by the debtor;
or
|
|
(f)
|
under
a guarantee, indemnity or similar obligation entered into by the
debtor in
respect of a liability of another person which would fall within
(a) to
(e) if the references to the debtor referred to the other
person;
|
“First
Ship”
means
the Norwegian International flagged 1987 built 77,749 cu.m LPG carrier currently
named “XXXXX XXXX”
registered in the name of the Time Charterer with IMO Number 8519966 which
is to
be purchased by IBIS and registered in its name under the Bahamas flag with
the
same name;
“Flanders
Time Charter”
means
the time charter dated 25 February 2005 and made between EID and the Time
Charterer pursuant to which EID has agreed to let, and the Time Charterer has
agreed to take, the Second Ship on time charter for the period and on the terms
and conditions specified therein;
“Guarantee”
means
the guarantee of the liabilities of the Borrowers under the Finance Documents
and the Master Agreements dated the same date as this Agreement and executed
by
the Guarantor in favour of the Lender;
“Guarantor”
means
MC Shipping Inc., a corporation incorporated in the Republic of Liberia whose
registered office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx;
“IBIS”
means
MC Ibis Shipping Limited, a company incorporated in The Commonwealth of the
Bahamas whose registered office is at 0 Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxx,
Bahamas;
“Insurances”
means,
in relation to a Ship:
|
(a)
|
all
policies and contracts of insurance, including entries of the Ship
in any
protection and indemnity or war risks association, which are effected
in
respect of the Ship, its Earnings or otherwise in relation to it;
and
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
|
“Interest
Period”
means a
period determined in accordance with Clause 5;
“ISM
Code”
means
the International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly
as
Resolutions A.741 (18) and A.788 (19), as the same may be amended or
supplemented from time to time (and the terms “safety
management system”,
“Safety
Management Certificate”
and
“Document
of Compliance”
have
the same meanings as are given to them in the ISM Code);
“ISPS
Code”
means
the International Ship and Port Facility Security Code constituted pursuant
to
resolution A.924(22) of the International Maritime Organisation (“IMO”)
adopted by a Diplomatic conference of the IMO on Maritime Security on 13
December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea
Convention (SOLAS) 1974 (as amended);
“Kobe
Time Charter”
means
the time charter dated 25 February 2005 and made between IBIS and the Time
Charterer pursuant to which IBIS has agreed to let, and the Time Charterer
has
agreed to take, the First Ship on time charter for the period and on the terms
and conditions specified therein;
“Lender”
means
Scotiabank Europe plc, a company incorporated in England and Wales and acting
through its office at Scotia House, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
(or through another office notified to the Borrowers under Clause 25.6) or
its
successors or assigns; or
“LIBOR”
means,
for an Interest Period, the rate per annum determined by the Lender to be the
rate at which deposits in Dollars are offered to the Lender by leading banks
in
the London Interbank Market at the Lender's request at or about 11.00 a.m.
(London time) on the Quotation Date for that Interest Period for a period equal
to that Interest Period and for delivery on the first Business Day of
it;
“Loan”
means
the principal amount of the Advances or (as the context requires) the principal
amount thereof for the time being outstanding under this Agreement;
“Major
Casualty”
means
any casualty to a Ship in respect of which the claim or the aggregate of the
claims against all insurers, before adjustment for any relevant franchise or
deductible, exceeds $500,000 or the equivalent in any other
currency;
“Manager’s
Letter of Undertaking”
means,
in relation to a Ship and the Approved Manager of it, a letter of subordination
addressed to the Lender in such form as the Lender may require;
“Margin”
means,
in relation to an Advance:
|
(a)
|
while
the Time Charter relating to the Ship financed with that Advance
remains
in full force and effect (or has been replaced by a Replacement Time
Charter), 0.85 per cent. per annum;
or
|
| (b) |
otherwise:
|
|
(i)
|
1.0
per cent. per annum if Tangible Net Worth is at least $75,000,000;
or
|
|
(ii)
|
otherwise,
1.1 per cent. per annum;
|
“Master
Agreement Liabilities”
means
the Advance A Master Agreement Liabilities and the Advance B Master Agreement
Liabilities;
“Master
Agreement Security Deed”
means,
in relation to a Master Agreement, a charge over the Master Agreement in such
form as the Lender may require;
“Master
Agreements”
means
the Advance A Master Agreement and the Advance B Master Agreement;
“MOA”
means:
|
(a)
|
in
relation to the First Ship, the memorandum of agreement dated 23
February
2005 and made by and between IBIS as purchaser and the Time Charterer
as
seller of the First Ship; and
|
|
(b)
|
in
relation to the Second Ship, the memorandum of agreement dated 23
February
2005 and made by and between EID as purchaser and the Time Charterer
as
seller of the Second Ship;
|
“Mortgage”
means,
in relation to a Ship, the first priority
statutory Bahamas ship mortgage
on the Ship in such
form
as the Lender may require;
“Negotiation
Period”
has the
meaning given in Clause 4.6;
“Payment
Currency”
has the
meaning given in Clause 20.4;
“Permitted
Security Interests”
means:
|
(a)
|
Security
Interests created by the Finance
Documents;
|
|
(b)
|
liens
for unpaid master’s and crew’s wages in accordance with usual maritime
practice;
|
|
(c)
|
liens
for salvage;
|
|
(d)
|
liens
arising by operation of law for not more than 2 months’ prepaid hire under
any charter in relation to a Ship not prohibited by this
Agreement;
|
|
(e)
|
liens
for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of a Ship, provided
such
liens do not secure amounts more than 30 days overdue (unless the
overdue
amount is being contested by a Borrower in good faith by appropriate
steps) and subject, in the case of liens for repair or maintenance,
to
Clause 13.13;
|
|
(f)
|
any
Security Interest created in favour of a plaintiff or defendant in
any
proceedings or arbitration as security for costs and expenses where
a
Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith; and
|
|
(g)
|
Security
Interests arising by operation of law in respect of taxes which are
not
overdue for payment or in respect of taxes being contested in good
faith
by appropriate steps and in respect of which appropriate reserves
have
been made;
|
“Pertinent
Document”
means:
|
(a)
|
any
Finance Document;
|
|
(b)
|
any
policy or contract of insurance contemplated by or referred to in
Clause
12 or any other provision of this Agreement or another Finance
Document;
|
|
(c)
|
any
other document contemplated by or referred to in any Finance Document;
and
|
|
(d)
|
any
document which has been or is at any time sent by or to the Lender
in
contemplation of or in connection with any Finance Document or any
policy,
contract or document falling within paragraphs (b) or
(c);
|
“Pertinent
Jurisdiction”,
in
relation to a company, means:
|
(a)
|
England
and Wales;
|
|
(b)
|
the
country under the laws of which the company is incorporated or
formed;
|
|
(c)
|
a
country in which the company’s central management and control is or has
recently been exercised;
|
|
(d)
|
a
country in which the overall net income of the company is subject
to
corporation tax, income tax or any similar
tax;
|
|
(e)
|
a
country in which assets of the company (other than securities issued
by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or
in which
a Security Interest created by the company must or should be registered
in
order to ensure its validity or priority;
and
|
|
(f)
|
a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which
would
have such jurisdiction if their assistance were requested by the
courts of
a country referred to in paragraphs (b) or
(c);
|
“Pertinent
Matter”
means:
|
(a)
|
any
transaction or matter contemplated by, arising out of, or in connection
with a Pertinent Document; or
|
|
(b)
|
any
statement relating to a Pertinent Document or to a transaction or
matter
falling within paragraph (a);
|
and
covers any such transaction, matter or statement, whether entered into, arising
or made at any time before the signing of this Agreement or on or at any time
after that signing;
“Potential
Event of Default”
means
an event or circumstance which, with the giving of any notice, the lapse of
time, a determination of the Lender and/or the satisfaction of any other
condition, would constitute an Event of Default;
“Quotation
Date”
means,
in relation to any Interest Period (or any other period for which an interest
rate is to be determined under any provision of a Finance Document), the day
on
which quotations would ordinarily be given by leading banks in the London
Interbank Market for deposits in the currency in relation to which such rate
is
to be determined for delivery on the first day of that Interest Period or other
period;
“Relevant
Person”
has the
meaning given in Clause 18.7;
“Repayment
Date”
means a
date on which a repayment is required to be made under Clause 7;
“Replacement
Time Charter”
means,
in relation to a Ship, a time charter of that Ship the charterer of which,
in
the reasonable opinion of the Lender, is of similar credit standing and
reputation to the Time Charterer;
“Requisition
Compensation”
includes all compensation or other moneys payable by reason of any act or event
such as is referred to in paragraph (b) of the definition of “Total
Loss”;
“Retention
Account”
means,
in relation to an Advance and the Ship financed by it, an account in the name
of
the Borrower owning that Ship with the Lender in London designated “[Name of
Borrower]-
Retention
Account”, or any other account (with that or another office of the Lender or
with a bank or financial institution other than the Lender) which is designated
by the Lender as the Retention Account for that Advance for the purposes of
this
Agreement;
“Second
Ship”
means
the Bahamas flagged 75,353 cu.m LPG carrier currently named “XXXXX
XXXXXXXX”,
registered in the name of the Time Charterer with IMO Number 9000883 which
is to
be purchased by EID and registered in its name under the Bahamas flag with
the
same name;
“Secured
Liabilities”
means
all liabilities which the Borrowers, the Security Parties or any of them have,
at the date of this Agreement or at any later time or times, under or by virtue
of the Finance Documents or the Master Agreements or any judgment relating
to
the Finance Documents or the Master Agreements; and for this purpose, there
shall be disregarded any total or partial discharge of these liabilities, or
variation of their terms, which is effected by, or in connection with, any
bankruptcy, liquidation, arrangement or other procedure under the insolvency
laws of any country;
“Security
Interest”
means:
|
(a)
|
a
mortgage, charge (whether fixed or floating) or pledge, any maritime
or
other lien or any other security interest of any
kind;
|
|
(b)
|
the
rights of the plaintiff under an action in
rem
in
which the vessel concerned has been arrested or a writ has been issued
or
similar step taken; and
|
|
(c)
|
any
arrangement entered into by a person (A) the effect of which is to
place
another person (B) in a position which is similar, in economic terms,
to
the position in which B would have been had he held a security interest
over an asset of A; but this paragraph (c) does not apply to a right
of
set off or combination of accounts conferred by the standard terms
of
business of a bank or financial
institution;
|
“Security
Party”
means
the Guarantor, any Approved Manager and any other person (except the Lender)
who, as a surety or mortgagor, as a party to any subordination or priorities
arrangement, or in any similar capacity, executes a document falling within
the
last paragraph of the definition of “Finance Documents”;
“Security
Period”
means
the period commencing on the date of this Agreement and ending on the date
on
which the Lender notifies the Borrowers and the Security Parties
that:
|
(a)
|
all
amounts which have become due for payment by either Borrower or any
Security Party under the Finance Documents and the Master Agreements
have
been paid;
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for
payment)
under any Finance Document or either Master Agreement;
and
|
|
(c)
|
neither
a Borrower nor any Security Party has any future or contingent liability
under Clause 19,
20
or
21
or
any other provision of this Agreement or another Finance Document
or
either Master Agreement;
|
“Ships”
means
the First Ship and the Second Ship;
“Tangible
Net Worth”
has the
meaning given to it in the Guarantee;
“Time
Charterer”
means
Xxxxxxxx x.x. Shipping AS, a company incorporated in Norway whose registered
office is at Xxxxxxxxxxxxx 000, 0000 Xxxxx, Xxxxxx;
“Time
Charters”
means
the Kobe Time Charter and the Flanders Time Charter;
“Time
Charter Period”
means
in relation to a Time Charter, that part of the Security Period which falls
within the period commencing on the date the relevant Ship is delivered to
the
Time Charterer and ending on the date on which the Time Charter expires by
effluxion of time or (if earlier) on the date on which the Time Charter is
otherwise terminated or frustrated or the relevant Ship is withdrawn from hire
under the Time Charter;
“Total
Loss”
means,
in relation to a Ship:
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Ship;
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than its proper
value, a nominal consideration or without any consideration, which
is
effected by any government or official authority or by any person
or
persons claiming to be or to represent a government or official authority
(excluding a requisition for hire for a fixed period not exceeding
1 year
without any right to an extension) unless it is within 1 month redelivered
to the relevant Borrower’s full
control;
|
|
(c)
|
any
arrest, capture, seizure or detention of the Ship (including any
hijacking
or theft) unless it is within 1 month redelivered to the relevant
Borrower's full control;
|
“Total
Loss Date”
means:
|
(a)
|
in
the case of an actual loss of a Ship, the date on which it occurred
or, if
that is unknown, the date when the Ship was last heard
of;
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total
loss of
a Ship, the earliest of:
|
|
(c)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
(d)
|
the
date of any compromise, arrangement or agreement made by or on behalf
of a
Borrower with the Ship's insurers in which the insurers agree to
treat the
Ship as a total loss; and
|
|
(e)
|
in
the case of any other type of total loss, on the date (or the most
likely
date) on which it appears to the Lender that the event constituting
the
total loss occurred; and
|
“Transaction”has
the
meaning given in the Master Agreement to which it relates.
|
1.2
|
Construction
of certain terms.
In
this Agreement:
|
“approved”
means,
for the purposes of Clause 12,
approved in writing by the Lender;
“asset”
includes every kind of property, asset, interest or right, including any
present, future or contingent right to any revenues or other
payment;
“company”
includes any partnership, joint venture and unincorporated
association;
“consent”
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;
“contingent
liability”
means a
liability which is not certain to arise and/or the amount of which remains
unascertained;
“document”
includes a deed; also a letter, fax or telex;
“excess
risks”
means
the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of a Ship in
consequence of its insured value being less than the value at which that Ship
is
assessed for the purpose of such claims;
“expense”
means
any kind of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other tax;
“law”
includes any order or decree, any form of delegated legislation, any treaty
or
international convention and any regulation or resolution of the Council of
the
European Union, the European Commission, the United Nations or its security
council;
“legal
or administrative action”
means
any legal proceeding or arbitration and any administrative or regulatory action
or investigation;
“liability”
includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;
“months”
shall
be construed in accordance with Clause 1.3;
“obligatory
insurances”
means
all insurances effected, or which each Borrower is obliged to effect, under
Clause 12
or any
other provision of this Agreement or another Finance Document;
“parent
company”
has the
meaning given in Clause 1.4;
“person”
includes any company; any state, political sub-division of a state and local
or
municipal authority; and any international organisation;
“policy”,
in
relation to any insurance, includes a slip, cover note, certificate of entry
or
other document evidencing the contract of insurance or its terms;
“protection
and indemnity risks”
means
the usual risks covered by a protection and indemnity association managed in
London, including pollution
risks
and the
proportion (if any) of any sums payable to any other person or persons in case
of collision which are not recoverable under the hull and machinery policies
by
reason of the incorporation in them of clause 1 of the Institute Time Clauses
(Hulls)(1/10/83) or (with respect to Insurances commencing on or after
1/11/1995) clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the
Institute Amended Running Down Clause (1/10/71) or any equivalent
provision;
“regulation”
includes any regulation, rule, official directive, request or guideline whether
or not having the force of law of any governmental body, agency, department
or
regulatory, self-regulatory or other authority or organisation;
“subsidiary”
has the
meaning given in Clause 1.4;
“tax”
includes any present or future tax, duty, impost, levy or charge of any kind
which is imposed by any state, any political sub-division of a state or any
local or municipal authority (including any such imposed in connection with
exchange controls), and any connected penalty, interest or fine but does not
include tax or the net income of the Lender; and
“war
risks”
includes the risk of mines and all risks excluded by clause 23 of the Institute
Time Clauses (Hulls)(1/10/83) or (with respect to Insurances commencing on
or
after 1/11/1995) clause 24 of the Institute Time Clauses (Hulls)
(1/11/1995).
|
1.3
|
Meaning
of “month”.
A
period of one or more “months”
ends on the day in the relevant calendar month numerically corresponding
to the day of the calendar month on which the period started
(“the
numerically corresponding day”),
but:
|
|
(a)
|
on
the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there
is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day;
or
|
|
(b)
|
on
the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding
day;
|
and
“month”
and
“monthly”
shall
be construed accordingly.
|
1.4
|
Meaning
of “subsidiary”.
A
company (S) is a subsidiary of another company (P)
if:
|
|
(a)
|
a
majority of the issued shares in S (or a majority of the issued shares
in
S which carry unlimited rights to capital and income distributions)
are
directly owned by P or are indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority
of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs
of S
are conducted in accordance with the wishes of
P;
|
and
any
company of which S is a subsidiary is a parent company of S.
|
1.5
|
General
Interpretation.
In
this Agreement:
|
|
(a)
|
references
to, or to a provision of, a Finance Document or a Master Agreement
or any
other document are references to it as amended or supplemented, whether
before the date of this Agreement or
otherwise;
|
|
(b)
|
references
to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this
Agreement or otherwise;
|
|
(c)
|
words
denoting the singular number shall include the plural and vice versa;
and
|
|
(d)
|
Clauses
1.1 to 1.5 apply unless the contrary intention
appears.
|
|
1.6
|
Headings.
In
interpreting a Finance Document or any provision of a Finance Document,
all clause, sub-clause and other headings in that and any other Finance
Document shall be entirely
disregarded.
|
|
2
|
FACILITY
|
|
2.1
|
Amount
of facility.
Subject to the other provisions of this Agreement, the Lender shall
make a
loan facility not exceeding $68,000,000 available to the
Borrowers.
|
|
2.2
|
Purpose
of Loan.
The Borrowers undertake with the Lender to use each Advance only
for the
purpose stated in the preamble to this
Agreement.
|
|
3
|
DRAWDOWN
|
|
3.1
|
Request
for Advance.
Subject to the following conditions, the Borrowers may request
an Advance
to be made by ensuring that the Lender receives a completed Drawdown
Notice not later than 11.00 a.m. (London time) 3 Business Days
prior to
the intended Drawdown Date of that
Advance.
|
|
3.2
|
Availability.
The conditions referred to in Clause 3.1
are that:
|
|
(a)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
amount of Advance A shall not exceed
$27,000,000;
|
|
(c)
|
the
amount of Advance B shall not exceed $41,000,000;
and
|
|
(d)
|
the
aggregate amount of the Advances shall not exceed the
Commitment.
|
|
3.3
|
Drawdown
Notice irrevocable.
A
Drawdown Notice must be signed by a director, officer or attorney-in-fact
of both Borrowers; and, once served, a Drawdown Notice cannot be
revoked
without the prior consent of the Lender.
|
|
3.4
|
Disbursement
of Advance.
Subject to the provisions of this Agreement, the Lender shall on
each
Drawdown Date make the relevant Advance to the Borrowers; and payment
to
the Borrowers shall be made to the account of the Time Charterer
which the
Borrowers specify in the Drawdown Notice.
|
|
3.5
|
Disbursement
of Advance to third party.
The payment by the Lender under Clause 3.4
to
the Time Charterer shall constitute the making of the Advance and
the
Borrowers shall at that time become indebted, as principal and direct
obligor, to the Lender in an amount equal to the
Advance.
|
|
4
|
INTEREST
AND TRANSACTIONS
|
|
4.1
|
Payment
of normal interest.
Subject to the provisions of this Agreement, interest on an Advance
in
respect of each Interest Period applicable to it shall be paid by
the
Borrowers on the last day of that Interest
Period.
|
|
4.2
|
Normal
rate of interest.
Subject to the provisions of this Agreement, the rate of interest
on an
Advance in respect of an Interest Period applicable to it shall be
the
aggregate of:
|
|
(a)
|
the
applicable Margin;
|
|
(b)
|
LIBOR
for that Interest Period; and
|
|
(c)
|
any
costs notified by the Lender to the Borrower under clause 19.5 as
being
applicable for that Interest
Period.
|
|
4.3
|
Payment
of accrued interest.
In
the case of an Interest Period longer than 6 months, accrued interest
shall be paid every 6 months during that Interest Period and on the
last
day of that Interest Period.
|
|
4.4
|
Notification
of market disruption.
The Lender shall promptly notify the Borrowers if for any reason
the
Lender is unable to obtain Dollars in the London Interbank Market
in order
to fund an Advance (or any part of it) during any Interest Period
applicable to it, stating the circumstances which have caused such
notice
to be given.
|
|
4.5
|
Suspension
of drawdown.
If
the Lender's notice under Clause 4.4
is
served before an Advance is made, the Lender's obligation to make
the
Advance shall be suspended while the circumstances referred to in
the
Lender's notice continue.
|
|
4.6
|
Negotiation
of alternative rate of interest.
If
the Lender’s notice under Clause 4.4
is
served after an Advance is made, the Borrowers and the Lender shall
use
reasonable endeavours to agree, within the 30 days after the date
on which
the Lender serves its notice under Clause 4.4
(the “Negotiation
Period”),
an alternative interest rate or (as the case may be) an alternative
basis
for the Lender to fund or continue to fund the Advance during the
Interest
Period concerned.
|
|
4.7
|
Application
of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed
during the Negotiation Period shall take effect in accordance with
the
terms agreed.
|
|
4.8
|
Alternative
rate of interest in absence of agreement.
If
an alternative interest rate or alternative basis is not agreed
within the
Negotiation Period, and the relevant circumstances are continuing
at the
end of the Negotiation Period, then the Lender shall set an interest
period and interest rate representing the cost of funding of the
Lender in
Dollars or in any available currency of the Advance plus the applicable
Margin; and the procedure provided for by this Clause 4.8
shall be repeated if the relevant circumstances are continuing
at the end
of the interest period so set by the
Lender.
|
|
4.9
|
Notice
of prepayment.
If
the Borrowers do not agree with an interest rate set by the Lender
under
Clause 4.8,
the Borrowers may give the Lender not less than 15 Business Days'
notice
of its intention to prepay the Advance at the end of the interest
period
set by the Lender.
|
|
4.10
|
Prepayment.
A
notice under Clause 4.9
shall be irrevocable; and on the last Business Day of the interest
period
set by the Lender, the Borrowers shall prepay (without premium or
penalty)
the Advance, together with accrued interest thereon at the applicable
rate
plus the applicable Margin.
|
|
4.11
|
Application
of prepayment.
The provisions of Clause 7
shall apply in relation to the
prepayment.
|
|
4.12
|
Transactions
under the Master Agreements.
The Lender and the Borrowers agree
that:
|
|
(a)
|
the
Borrowers may from time to time request the Lender to conclude
Transactions for the purpose of hedging the Borrowers’ interest payment
obligations under Advance A and Advance B (or either of them). However,
signature of the Master Agreements does not commit the Lender to
conclude
Transactions, or even to offer terms for doing so;
|
|
(b)
|
Transactions
should only be used for the purpose of swapping the Borrowers’ interest
payment obligations under this Clause 4 from LIBOR-based funding
to
longer-term fixed rate funding and not for speculative
purposes;
|
|
(c)
|
floating
rate sums derived from such Transactions should be paid to the Borrowers
to meet the Borrowers’ interest payment obligations under this Clause 4;
and
|
|
(d)
|
no
Transactions shall be entered into which would result, at any time
during
the Security Period, in the notional principal amount of all Transactions
then current exceeding the amount of the Loan, as reducing from time
to
time under Clause 7.1.
|
|
4.13
|
Guarantee
of EID’s obligations. IBIS
unconditionally and
irrevocably:
|
|
(a)
|
guarantees
the due payment of all the Advance B Master Agreement
Liabilities;
|
|
(b)
|
undertakes
to pay to the Lender on the Lender’s first written demand, any such amount
which is not paid by EID when such amount becomes
due;
|
|
(c)
|
undertakes
to procure that EID shall perform all its other obligations under
the
Advance B Master Agreement; and
|
|
(d)
|
shall
fully indemnify the Lender on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against
or
incurred by the Lender as a result of or in connection with any obligation
or liability of EID which is hereby guaranteed by IBIS being or becoming
unenforceable, invalid, void or illegal; and the amount recoverable
under
this indemnity shall be equal to the amount which the Lender would
otherwise have been entitled to
recover.
|
|
4.14
|
Guarantee
of IBIS’s obligations. EID
unconditionally and irrevocably:
|
|
(a)
|
guarantees
the due payment of all the Advance A Master Agreement
Liabilities;
|
|
(b)
|
undertakes
to pay to the Lender on the Lender’s first written demand, any such amount
which is not paid by IBIS when such amount becomes
due;
|
|
(c)
|
undertakes
to procure that IBIS shall perform all its other obligations under
the
Advance B Master Agreement; and
|
|
(d)
|
shall
fully indemnify the Lender on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against
or
incurred by the Lender as a result of or in connection with any obligation
or liability of IBIS which is hereby guaranteed by EID being or becoming
unenforceable, invalid, void or illegal; and the amount recoverable
under
this indemnity shall be equal to the amount which the Lender would
otherwise have been entitled to
recover.
|
|
4.15
|
Principal
and independent debtor. The
Borrowers shall be liable under Clause 4.13 and 4.14 as principal
and
independent debtors and accordingly they shall not have, as regards
their
guarantees contained therein, any of the rights or defences of
a
surety.
|
|
4.16
|
Waiver
of rights and defences. Without
limiting the generality of Clause 4.15, no Borrower shall be discharged
by, nor have any claim against the Lender in respect
of:
|
|
(a)
|
any
Transaction being entered into under, or any amendment or supplement
being
made to, the Master Agreement to which it is not a
party;
|
|
(b)
|
any
arrangement or concession (including a rescheduling or acceptance
of
partial payments) relating to, or affecting, the Master Agreement
to which
it is not a party;
|
|
(c)
|
any
release or loss (even though negligent) of any right created by the
Master
Agreement to which it is not a
party;
|
|
(d)
|
any
failure by the Lender (even though negligent) promptly or properly
to
exercise or enforce any such right;
|
|
(e)
|
the
Master Agreement to which it is not a party now being or later becoming
void, unenforceable, illegal or invalid or otherwise defective for
any
reason, including a neglect to register
it;
|
|
(f)
|
any
insolvency or similar proceedings.
|
|
5
|
INTEREST
PERIODS
|
|
5.1
|
Commencement
of Interest Periods.
The first Interest Period applicable to an Advance shall commence
on the
Drawdown Date applicable to it and each subsequent Interest Period
applicable to it shall commence on the expiry of the preceding Interest
Period applicable to it.
|
|
5.2
|
Duration
of normal Interest Periods.
Subject to Clauses 5.3
and 5.4,
each Interest Period shall be:
|
|
(a)
|
3,
6, 9 or 12 months as notified by the Borrowers to the Lender not
later
than 11.00 a.m. (London time) 3 Business Days before the commencement
of
the Interest Period; or
|
|
(b)
|
3
months, if the Borrowers fail to notify the Lender by the time specified
in paragraph (a); or
|
|
(c)
|
such
other period as the Lender may agree with the
Borrowers.
|
|
5.3
|
Duration
of Interest Periods for repayment instalments.
In
respect of an amount due to be repaid under Clause 7
on
a particular Repayment Date, an Interest Period shall end on that
Repayment Date.
|
|
5.4
|
Non-availability
of matching deposits for Interest Period selected.
If, after the Borrowers have selected and the Lender has agreed
an
Interest Period longer than 6 months, the Lender notifies the Borrowers
by
11.00 a.m. (London time) on the second Business Day before the
commencement of the Interest Period that it is not satisfied that
deposits
in Dollars for a period equal to the Interest Period will be available
to
it in the London Interbank Market when the Interest Period commences,
the
Interest Period shall be of 3
months.
|
|
6
|
DEFAULT
INTEREST
|
|
6.1
|
Payment
of default interest on overdue amounts.
The Borrowers shall pay interest in accordance with the following
provisions of this Clause 6
on
any amount payable by the Borrowers under any Finance Document which
the
Lender does not receive on or before the relevant date, that
is:
|
|
(a)
|
the
date on which the Finance Documents provide that such amount is due
for
payment; or
|
|
(b)
|
if
a Finance Document provides that such amount is payable on demand,
the
date falling 3 Business Days after the date on which the demand is
served;
or
|
|
(c)
|
if
such amount has become immediately due and payable under Clause
18.4,
the date on which it became immediately due and
payable.
|
|
6.2
|
Default
rate of interest.
Interest shall accrue on an overdue amount from (and including)
the
relevant date until the date of actual payment (as well after as
before
judgment) at the rate per annum determined by the Lender to be
2 per cent.
above:
|
|
(a)
|
in
the case of an overdue amount of principal, the higher of the rates
set
out at Clauses 6.3(a)
and (b); or
|
|
(b)
|
in
the case of any other overdue amount, the rate set out at Clause
6.3(b).
|
|
6.3
|
Calculation
of default rate of interest.
The rates referred to in Clause 6.2
are:
|
|
(a)
|
the
rate applicable to the overdue principal amount immediately prior
to the
relevant date (but only for any unexpired part of any then current
Interest Period);
|
|
(b)
|
the
applicable Margin plus, in respect of successive periods of any
duration
(including at call) up to 3 months which the Lender may select
from time
to time:
|
|
(i)
|
LIBOR;
or
|
|
(ii)
|
if
the Lender determines that Dollar deposits for any such period are
not
being made available to it by leading banks in the London Interbank
Market
in the ordinary course of business, a rate from time to time determined
by
the Lender by reference to the cost of funds to it from such other
sources
as the Lender may from time to time
determine.
|
|
6.4
|
Notification
of interest periods and default rates.
The Lender shall promptly notify the Borrowers of each interest rate
determined by it under Clause 6.3
and of each period selected by it for the purposes of paragraph
(b)
of
that Clause; but this shall not be taken to imply that the Borrowers
are
liable to pay such interest only with effect from the date of the
Lender's
notification.
|
|
6.5
|
Payment
of accrued default interest.
Subject to the other provisions of this Agreement, any interest due
under
this Clause shall be paid on the last day of the period by reference
to
which it was determined.
|
|
6.6
|
Compounding
of default interest.
Any such interest which is not paid at the end of the period by reference
to which it was determined shall thereupon be
compounded.
|
|
6.7
|
Application
to Master Agreement.
For the avoidance of doubt, this Clause 6 does not apply to any amount
payable under either Master Agreement in respect of any continuing
Transaction as to which Section 2(e) (Default Interest; Other Amounts)
of
the relevant Master Agreement shall
apply.
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
|
7.1
|
Amount
of repayment instalments. The
Borrowers shall:
|
|
(a)
|
repay
Advance A by 14 consecutive 6-monthly instalments of $1,785,500 and
by a
balloon instalment for the outstanding balance repayable together
with the
fourteenth such instalment.
|
|
(b)
|
repay
Advance B by 22 consecutive 6-monthly instalments of $1,772,500 and
by a
balloon instalment for the outstanding balance repayable together
with the
twenty-second such instalment
|
|
7.2
|
Repayment
Dates.
The first instalment in respect of each Advance shall be repaid on
the
date falling 6 months after the Drawdown Date for that Advance. The
last
instalment in respect of Advance A shall be repaid on the date falling
84
months after the Drawdown Date in respect of Advance A and the last
instalment in respect of Advance B shall be repaid on the date falling
132
months after the Drawdown Date in respect of Advance
B.
|
|
7.3
|
Final
Repayment Date.
On
the final Repayment Date in respect of the last then outstanding
Advance,
the Borrowers shall additionally pay to the Lender all other sums
then
accrued or owing under any Finance
Document.
|
|
7.4
|
Voluntary
prepayment.
Subject to the following conditions, the Borrowers may prepay the
whole or
any part of an Advance on the last day of an Interest Period applicable
to
it.
|
|
7.5
|
Conditions
for voluntary prepayment.
The conditions referred to in Clause 7.4
are that:
|
|
(a)
|
a
partial prepayment shall be $250,000 or a higher integral multiple
of
$250,000;
|
|
(b)
|
the
Lender has received from the Borrowers at least 15 Business Days'
prior
written notice specifying the amount to be prepaid and the date on
which
the prepayment is to be made;
|
|
(c)
|
the
Borrowers have provided evidence satisfactory to the Lender that
any
consent required by either Borrower or any Security Party in connection
with the prepayment has been obtained and remains in force, and that
any
regulation relevant to this Agreement which affects either Borrower
or any
Security Party has been complied
with.
|
|
7.6
|
Effect
of notice of prepayment.
A
prepayment notice may not be withdrawn or amended without the consent
of
the Lender and the amount specified in the prepayment notice shall
become
due and payable by the Borrowers on the date for prepayment specified
in
the prepayment notice.
|
|
7.7
|
Mandatory
prepayment.
The Borrowers shall be obliged to make a prepayment in respect of
the Loan
of the amount specified in Clause
7.8:
|
|
(a)
|
if
a Ship is sold, on or before the date on which the sale is completed
by
delivery of that Ship to the buyer;
or
|
|
(b)
|
if
a Ship becomes a Total Loss, on the earlier of the date falling 120
days
after the Total Loss Date and the date of receipt by the Lender of
the
proceeds of insurance relating to such Total Loss; or
|
|
(c)
|
if
V. Investments Limited, V. Ship Group Ltd., V Holding Limited, Greysea
Limited, Close Securities Limited, Close Investment Partners Limited,
Navalmar (UK) Limited, Bogazzi Fimpar SpA and Xxxxxx Xxxxxxx between
them
cease to be the ultimate beneficial owners of at least 50.1 per cent.
of
the shares in the Guarantor or to have the ultimate control of at
least
50.1 per cent. of the voting rights attaching to any of the shares
in the
Guarantor and the Lender and the Borrowers have not reached mutually
acceptable terms on which to continue this Agreement pursuant to
Clause
7.9.
|
|
7.8
|
Mandatory
prepayment.
The amount of any prepayment pursuant to Clause 7.7 shall
be:
|
|
(a)
|
in
case of sale or Total Loss of a Ship, the highest
of:
|
|
(i)
|
the
amount of the Advance used to acquire the
Ship;
|
|
(ii)
|
such
sum as is necessary to ensure that, in relation to the remaining
amount of
the Loan and the remaining Ship or Ships immediately after such
prepayment, the same asset cover ratio (calculated as per Clause
14.3)
applies as applied immediately prior to such prepayment;
and
|
|
(iii)
|
such
sum as shall ensure that the requirements of Clause 14.1 are complied
with
in relation to the remaining amount of the Loan and the remaining
Ship
immediately after such prepayment;
or
|
|
(b)
|
in
the case of sale or Total Loss of the second of the Ships subject
to a
Mortgage, the whole of the Loan; or
|
|
(c)
|
in
the circumstances contemplated in Clause 7.7(c), the whole of the
Loan.
|
Any
such
prepayment pursuant to paragraph (a) shall be applied first to prepay the
Advance used to acquire the relevant Ship and thereafter against the repayment
instalments of the other Advancespecified in Clause 7.1 in inverse order of
maturity.
|
7.9
|
Change
of control of Guarantor. In
the circumstances contemplated in Clause 7.7(c), the Borrowers and
the
Lender shall consult for a period not exceeding 45 days (the “Relevant
Period”)
with a view to agreeing and implementing terms mutually acceptable
to both
the Borrowers and the Lender upon which to continue to make the Loan
available. If at the end of the Relevant Period no mutually acceptable
agreement is reached to continue to make the Loan available, the
Borrowers
shall prepay the Loan in full within 5 Business Days of the end of
the
Relevant Period.
|
|
7.10
|
Amounts
payable on prepayment.
A
prepayment shall be made together with accrued interest (and any
other
amount payable under Clause 20
or
otherwise) in respect of the amount prepaid and, if the prepayment
is not
made on the last day of an Interest Period applicable to the sum
prepaid,
together with any sums payable under Clause 20.1(b)
but without premium or penalty.
|
|
7.11
|
Application
of partial prepayment.
Unless otherwise provided in this Clause 7, each partial prepayment
shall
be applied against the repayment instalments of the relevant Advance
specified in Clause 7.1
in
inverse order of maturity.
|
|
7.12
|
No
reborrowing.
No
amount prepaid may be reborrowed.
|
|
7.13
|
Unwinding
of Transactions.
On
or prior to any repayment or prepayment of an Advance or any part
of it
under this Clause 7 or any other provision of this Agreement, the
Borrowers shall wholly or partially reverse, offset, unwind or otherwise
terminate one or more of the continuing Transactions so that the
notional
principal amount of the continuing Transactions thereafter remaining
does
not and will not in the future (taking into account the scheduled
amortisation) exceed the amount of the Loan as reducing from time
to time
thereafter pursuant to Clause 7.1.
|
|
8
|
CONDITIONS
PRECEDENT
|
|
8.1
|
Documents,
fees and no default.
The Lender's obligation to make an Advance and to enter into any
Transaction is subject to the following conditions precedent:
|
|
(a)
|
that,
on or before service of the Drawdown Notice for an Advance, the
Borrowers
enter into hedging arrangements with the Lender on terms in all
respects
approved by the Lender to hedge the whole of LIBOR risk under that
Advance
for a period at least equal to the Time Charter Period in respect
of the
Ship to be acquired with that
Advance;
|
|
(b)
|
that,
on or before the service of the first Drawdown Notice or the making
of any
request to enter into a Transaction, the Lender receives the documents
described in Part A of Schedule 2 in form and substance satisfactory
to it
and its lawyers;
|
|
(c)
|
that,
on or before each Drawdown Date but prior to the making of the
relevant
Advance, the Lender receives the documents described in Part B
of Schedule
2 in form and substance satisfactory to it and its
lawyers;
|
|
(d)
|
that
both at the date of each Drawdown Notice and at each Drawdown
Date:
|
|
(i)
|
no
Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the Loan;
|
|
(ii)
|
the
representations and warranties in Clause 9.1
and those of either Borrower or any Security Party which are set
out in
the other Finance Documents would be true and not misleading if repeated
on each of those dates with reference to the circumstances then existing;
and
|
|
(iii)
|
none
of the circumstances contemplated by Clause 4.4
has occurred and is continuing;
|
|
(e)
|
that,
if the ratio set out in Clause 14.1
were applied immediately following the making of that Advance, the
Borrowers would not be obliged to provide additional security or
prepay
part of the Loan under that Clause;
and
|
|
(f)
|
that
the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the
Finance Documents and the Master Agreements which the Lender may
request
by notice to the Borrowers prior to the Drawdown
Date.
|
|
8.2
|
Waivers
of conditions precedent.
If
the Lender, at its discretion, permits an Advance to be borrowed
before
certain of the conditions referred to in Clause 8.1
are satisfied, the Borrowers shall ensure that those conditions
are
satisfied within 10 Business Days after the Drawdown Date (or such
longer
period as the Lender may
specify).
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
|
9.1
|
General.
Each
Borrower represents and warrants to the Lender as
follows.
|
|
9.2
|
Status.
It
is duly incorporated and validly existing under the laws of The
Commonwealth of Bahamas.
|
|
9.3
|
Share
capital and ownership. It
has an authorised share capital of $5,000 divided into 5000 registered
shares of $1 each, all of which shares have been issued fully paid,
and
the legal title and beneficial ownership of all those shares is held,
free
of any Security Interest or other claim, by the
Guarantor.
|
|
9.4
|
Corporate
power.
It
has the corporate capacity, and has taken all corporate action
and
obtained all consents necessary for
it:
|
|
(a)
|
to
execute the MOA to which it is a party, to purchase and pay for the
relevant Ship under that MOA and to register that Ship in its name
under
the Bahamas flag;
|
|
(b)
|
to
execute the Master Agreement and the Finance Documents to which it
is a
party; and
|
|
(c)
|
to
borrow under this Agreement, to enter into Transactions under the
Master
Agreement to which it is a party and to make all the payments contemplated
by, and to comply with, those Finance Documents and under the Master
Agreement to which it is a party.
|
|
9.5
|
Consents
in force.
All the consents referred to in Clause 9.4
remain in force and nothing has occurred which makes any of them
liable to
revocation.
|
|
9.6
|
Legal
validity; effective Security Interests.
The Finance Documents and the Master Agreement to which it is a
party, do
now or, as the case may be, will, upon execution and delivery (and,
where
applicable, registration as provided for in the Finance
Documents):
|
|
(a)
|
constitute
that Borrower's legal, valid and binding obligations enforceable
against
that Borrower in accordance with their respective terms;
and
|
|
(b)
|
create
legal, valid and binding Security Interests enforceable in accordance
with
their respective terms over all the assets to which they, by their
terms,
relate;
|
subject
to any relevant insolvency laws affecting creditors' rights
generally.
|
9.7
|
No
third party Security Interests.
Without limiting the generality of Clause 9.6,
at the time of the execution and delivery of each Finance Document
and the
Master Agreement to which it is a
party:
|
|
(a)
|
it
will have the right to create all the Security Interests which that
Finance Document purports to create;
and
|
|
(b)
|
no
third party will have any Security Interest (except for Permitted
Security
Interests) or any other interest, right or claim over, in or in relation
to any asset to which any such Security Interest, by its terms,
relates.
|
|
9.8
|
No
conflicts.
The execution by it of each Finance Document and the Master Agreement
to
which it is a party, and the borrowing by that Borrower of the Loan,
and
its compliance with each Finance Document and the Master Agreement
to
which it is a party will not involve or lead to a contravention
of:
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of that Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on
that
Borrower or any of its assets.
|
|
9.9
|
No
withholding taxes.
All payments which it is liable to make under the Finance Documents
to
which it is a party may be made without deduction or withholding
for or on
account of any tax payable under any law of any Pertinent
Jurisdiction.
|
|
9.10
|
No
default.
No
Event of Default or Potential Event of Default has occurred and is
continuing.
|
|
9.11
|
Information.
All information which has been provided in writing by it or on its
behalf
or on behalf of any Security Party to the Lender in connection with
any
Finance Document satisfied the requirements of Clause 10.5;
all audited and unaudited accounts which have been so provided satisfied
the requirements of Clause 10.7;
and there has been no material adverse change in the financial position
or
state of affairs of either Borrower from that disclosed in the latest
of
those accounts.
|
|
9.12
|
No
litigation.
No
legal or administrative action involving either Borrower (including
action
relating to any alleged or actual breach of the ISM Code or the ISPS
Code)
has been commenced or taken or, to either Borrower's knowledge, is
likely
to be commenced or taken which, in either case, would be likely to
have a
material adverse effect on either Borrower's financial position or
state
of affairs.
|
|
9.13
|
No
rebates etc.
There is no agreement or understanding to allow or pay any rebate,
premium, commission, discount or other benefit or payment (howsoever
described) to it, the Time Charterer or a third party in connection
with
the purchase by that Borrower of the relevant Ship, other than as
disclosed to the Lender in writing on or prior to the date of this
Agreement.
|
|
9.14
|
Compliance
with certain undertakings.
At
the date of this Agreement, the Borrowers are in compliance with
Clauses
10.2,
10.4, 10.9
and 10.13.
|
|
9.15
|
Taxes
paid.
It
has paid all taxes applicable to, or imposed on or in relation to
that
Borrower, its business or the Ship to be owned by
it.
|
|
9.16
|
ISM
and ISPS Code compliance.
All requirements of the ISM Code and of the ISPS Code as they relate
to
Borrowers, the Approved Managers and the Ships have been complied
with.
|
|
10
|
GENERAL
UNDERTAKINGS
|
|
10.1
|
General.
Each Borrower undertakes with the Lender to comply with the following
provisions of this Clause 10 at all times during the Security Period,
except as the Lender may otherwise
permit.
|
|
10.2
|
Title;
negative pledge.
It
will:
|
|
(a)
|
as
from purchase of the Ship owned by that Borrower hold the legal title
to,
and own the entire beneficial interest in, that Ship, its Earnings
and its
Insurances, free from all Security Interests and other interests
and
rights of every kind, except for Permitted Security Interests;
and
|
|
(b)
|
not
create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or
future.
|
|
10.3
|
No
disposal of assets.
It
will not transfer, lease or otherwise dispose
of:
|
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or
a
number of transactions, whether related or not (except the Ship owned
by
that Borrower so long as the Borrowers comply with the provisions
of
Clauses 7.7(a) and 7.8(a)); or
|
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation.
|
|
10.4
|
No
other liabilities or obligations to be incurred.
It
will not incur any liability or obligation except liabilities and
obligations under the MOA, the Master Agreement and the Finance Documents
to which it is or is to be a party and liabilities or obligations
reasonably incurred in the ordinary course of owning and operating
the
Ship owned by it.
|
|
10.5
|
Information
provided to be accurate.
All financial and other information which is provided in writing
by or on
behalf of a Borrower under or in connection with any Finance Document
will
be true and not misleading and will not omit any material fact
or
consideration.
|
|
10.6
|
Provision
of financial statements.
It
will send to the Lender as
soon as possible, but in no event later than 90 days after the
end of each
financial year of that Borrower, unaudited financial statements
of that
Borrower certified as to their correctness by an authorised representative
of that Borrower.
|
|
10.7
|
Form
of financial statements.
All financial statements delivered under Clause 10.6
will:
|
|
(a)
|
be
prepared in accordance with all applicable laws and auditing standards
generally accepted in the United States of America consistently
applied;
|
|
(b)
|
present
fairly in all material respects the financial position of the relevant
Borrower at the date of those financial statements and the results
of its
operations and cash flows for the period to which those financial
statements relate; and
|
|
(c)
|
be
free of material misstatement and fully disclose or provide for all
significant liabilities of the relevant
Borrower.
|
|
10.8
|
Shareholder
and creditor notices.
It
will send the Lender, at the same time as they are despatched, copies
of
all communications which are despatched to that Borrower's shareholders
or
creditors or any class of them.
|
|
10.9
|
Consents.
It
will maintain in force and promptly obtain or renew, and will promptly
send certified copies to the Lender of, all consents
required:
|
|
(a)
|
for
that Borrower to perform its obligations under any Finance Document
and
the Master Agreement to which it is a
party;
|
|
(b)
|
for
the validity or enforceability of any Finance Document and the Master
Agreement to which it is a party;
|
|
(c)
|
for
that Borrower to continue to own and operate the Ship owned by
it;
|
and
that
Borrower will comply with the terms of all such consents.
|
10.10
|
Maintenance
of Security Interests.
It
will:
|
|
(a)
|
at
its own cost, do all that it reasonably can to ensure that any Finance
Document to which it is a party validly creates the obligations and
the
Security Interests which it purports to create;
and
|
|
(b)
|
without
limiting the generality of paragraph (a), at its own cost, promptly
register, file, record or enrol any Finance Document to which it
is a
party with any court or authority in all Pertinent Jurisdictions,
pay any
stamp, registration or similar tax in all Pertinent Jurisdictions
in
respect of any Finance Document to which it is a party, give any
notice or
take any other step which may be or become necessary or desirable
for any
Finance Document to which it is a party to be valid, enforceable
or
admissible in evidence or to ensure or protect the priority of any
Security Interest which it creates.
|
|
10.11
|
Notification
of litigation.
It
will provide the Lender with details of any legal or administrative
action
involving that Borrower, any Security Party, any Approved Manager
or the
Ship owned by it, its Earnings or its Insurances as soon as such
action is
instituted or it becomes apparent to that Borrower that it is likely
to be
instituted, unless it is clear that the legal or administrative action
cannot be considered material in the context of any Finance Document.
|
|
10.12
|
No
amendment to MOAs.
It
will not agree to any amendment or supplement to, or waive or fail
to
enforce, the MOA to which it is a party or any of its provisions
after
copies duly executed by both parties thereto have been submitted
to the
Lender.
|
|
10.13
|
Principal
place of business.
It
will maintain its main place of business, and keep its corporate
documents
and records, at the address stated in Clause 27.2(a); and it will
not
establish, or do anything as a result of which it would be deemed
to have,
a place of business in any country other than The
Commonwealth of the Bahamas.
|
|
10.14
|
Confirmation
of no default.
It
will, within 2 Business Days after service by the Lender of a written
request, serve on the Lender a notice which is signed by 2 directors
of
that Borrower and which:
|
|
(a)
|
states
that no Event of Default or Potential Event of Default has occurred;
or
|
|
(b)
|
states
that no Event of Default or Potential Event of Default has occurred,
except for a specified event or matter, of which all material details
are
given.
|
|
10.15
|
Notification
of default.
It
will notify the Lender as soon as that Borrower becomes aware
of:
|
|
(a)
|
the
occurrence of an Event of Default or a Potential Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default or a Potential Event
of
Default may have occurred;
|
and
will
keep the Lender fully up-to-date with all developments.
|
10.16
|
Provision
of further information.
It
will, as soon as practicable after receiving the request, provide
the
Lender with any additional financial or other information
relating:
|
|
(a)
|
to
that Borrower, the Ship owned by it, its Earnings or its Insurances;
or
|
|
(b)
|
to
any other matter relevant to, or to any provision of, a Finance Document
to which it is a party;
|
which
may
be requested by the Lender at any time. In addition, it will use its best
endeavours to procure annual and semi-annual financial statements from the
Time
Charterers.
|
10.17
|
Maintenance
of minimum balances on the Earnings Accounts.
It will ensure that there shall always be, throughout the Security
Period,
a credit balance of at least $250,000 on the Earnings Account relating
to
the Ship owned by it (such that the aggregate credit balance on both
Earnings Accounts is at least
$500,000).
|
|
11
|
CORPORATE
UNDERTAKINGS
|
|
11.1
|
General.
Each Borrower also undertakes with the Lender to comply with the
following
provisions of this Clause 11
at
all times during the Security Period except as the Lender may otherwise
permit.
|
|
11.2
|
Maintenance
of status.
It
will maintain its separate corporate existence and remain in existence
under the laws of The Commonwealth of the
Bahamas.
|
|
11.3
|
Negative
undertakings.
It
will not:
|
|
(a)
|
carry
on any business other than the ownership, chartering and operation
of the
Ship owned by it;
|
| (b) | (i) |
provide
any form of credit or financial assistance
to:
|
|
(A)
|
a
person who is directly or indirectly interested in that Borrower's
share
or loan capital; or
|
|
(B)
|
any
company in or with which such a person is directly or indirectly
interested or connected; or
|
|
(ii)
|
incur
any Financial Indebtedness owing to such a person or company except
where
such loan or loans are fully subordinated to the rights of the Lender
under the Finance Documents and under the Master Agreements; or
|
| (iii) |
enter
into any transaction with or involving such a person or
company;
|
|
(c)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share capital;
or
|
|
(d)
|
enter
into any form or amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
|
|
12
|
INSURANCE
|
|
12.1
|
General.
Each Borrower also undertakes with the Lender to comply with the
following
provisions of this Clause 12
at
all times during the Security Period in relation to the Ship owned
by it
(after that Ship has been delivered to it under the relevant MOA)
except
as the Lender may otherwise permit.
|
|
12.2
|
Maintenance
of obligatory insurances.
It
shall keep the Ship owned by it insured at the expense of that
Borrower
against:
|
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks;
|
|
(c)
|
protection
and indemnity risks; and
|
|
(d)
|
any
other risks against which the Lender considers, having regard to
practices
and other circumstances prevailing at the relevant time, it would
in the
opinion of the Lender be reasonable for that Borrower to insure and
which
are specified by the Lender by notice to that
Borrower.
|
|
12.3
|
Terms
of obligatory insurances.
It
shall effect such insurances in respect of the Ship owned by
it:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount
on an
agreed value basis at least the greater
of:
|
|
(i)
|
when
aggregated with the insured value of the other Ship, 110 per cent.
of the
Loan; and
|
|
(ii)
|
the
market value of that Ship; and
|
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount
equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry with protection and indemnity
risks
associations belonging to the International Group of Protection and
Indemnity Associations;
|
|
(d)
|
in
relation to protection and indemnity risks in respect of that Ship's
full
tonnage;
|
|
(e)
|
on
approved terms; and
|
|
(f)
|
through
approved brokers and with approved insurance companies and/or underwriters
or, in the case of war risks and protection and indemnity risks,
in
approved war risks and protection and indemnity risks
associations.
|
|
12.4
|
Further
protections for the Lender.
In
addition to the terms set out in Clause 12.3,
it shall procure that the obligatory insurances effected by it
shall:
|
|
(a)
|
whenever
the Lender requires name (or be amended to name) the Lender as additional
named assured for its rights and interests, warranted no operational
interest and with full waiver of rights of subrogation against the
Lender,
but without the Lender thereby being liable to pay (but having the
right
to pay) premiums, calls or other assessments in respect of such
insurance;
|
|
(b)
|
name
the Lender as loss payee with such directions for payment as the
Lender
may specify;
|
|
(c)
|
provide
that all payments by or on behalf of the insurers under such obligatory
insurances to the Lender shall be made without set-off, counterclaim
or
deductions or condition whatsoever;
|
|
(d)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the
Lender;
|
|
(e)
|
provide
that the Lender may make proof of loss if that Borrower fails to
do
so;
|
|
(f)
|
provide
that if any such obligatory insurance is cancelled, or if any substantial
change is made in the coverage which adversely affects the interest
of the
Lender, or if any such obligatory insurance is allowed to lapse for
non-payment of premium, such cancellation, change or lapse shall
not be
effective with respect to the Lender for 15 days (or 7 days in the
case of
war risks) after receipt by the Lender of prior written notice from
the
insurers of such cancellation, change or
lapse.
|
|
12.5
|
Renewal
of obligatory insurances.
It
shall:
|
|
(a)
|
at
least 21 days before the expiry of any obligatory insurance effected
by
it:
|
|
(i)
|
notify
the Lender of the brokers (or other insurers) and any protection
and
indemnity or war risks association through or with whom that Borrower
proposes to renew that obligatory insurance and of the proposed terms
of
renewal; and
|
|
(ii)
|
obtain
the Lender's approval to the matters referred to in paragraph
(i);
|
|
(b)
|
at
least 14 days before the expiry of any obligatory insurance effected
by
it, renew that obligatory insurance in accordance with the Lender's
approval pursuant to paragraph (a);
and
|
|
(c)
|
procure
that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Lender in writing of the terms
and
conditions of the renewal.
|
|
12.6
|
Copies
of policies; letters of undertaking.
It
shall ensure that all approved brokers provide the Lender with pro
forma
copies of all policies relating to the obligatory insurances which
they
are to effect or renew and of a letter or letters or undertaking
in a form
required by the Lender and including undertakings by the approved
brokers
that:
|
|
(a)
|
they
will have endorsed on each policy, immediately upon issue, a loss
payable
clause and a notice of assignment complying with the provisions of
Clause
12.4;
|
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the
order
of the Lender in accordance with the said loss payable clause;
|
|
(c)
|
they
will advise the Lender immediately of any material change to the
terms of
the obligatory insurances;
|
|
(d)
|
they
will notify the Lender, not less than 14 days before the expiry of
the
obligatory insurances, in the event of their not having received
notice of
renewal instructions from that Borrower or its agents and, in the
event of
their receiving instructions to renew, they will promptly notify
the
Lender of the terms of the instructions;
and
|
|
(e)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship under such obligatory insurances any premiums
or
other amounts due to them or any other person whether in respect
of the
Ship or otherwise, they waive any lien on the policies, or any sums
received under them, which they might have in respect of such premiums
or
other amounts, and they will not cancel such obligatory insurances
by
reason of non-payment of such premiums or other amounts, and will
arrange
for a separate policy to be issued in respect of the Ship forthwith
upon
being so requested by the Lender.
|
|
12.7
|
Copies
of certificates of entry.
It
shall ensure that any protection and indemnity and/or war risks
associations in which the Ship owned by it is entered provides
the Lender
with:
|
|
(a)
|
a
certified copy of the certificate of entry for that
Ship;
|
|
(b)
|
a
letter or letters of undertaking in such form as may be required
by the
Lender; and
|
|
(c)
|
if
that Ship trades to the United States of America and where required
to be
issued under the terms of insurance/indemnity provided by that Borrower's
protection and indemnity association, a certified copy of each United
States of America voyage quarterly declaration (or other similar
document
or documents) made by that Borrower in relation to that Ship in accordance
with the requirements of such protection and indemnity association;
and
|
|
(d)
|
if
that Ship trades to the United States of America, a certified copy
of each
certificate of financial responsibility for pollution by oil or other
Environmentally Sensitive Material issued by the relevant certifying
authority in relation to that Ship.
|
|
12.8
|
Deposit
of original policies.
It
shall ensure that all policies relating to obligatory insurances
are
deposited with the approved brokers through which the insurances
are
effected or renewed.
|
|
12.9
|
Payment
of premiums.
It
shall punctually pay all premiums or other sums payable in respect
of the
obligatory insurances and produce all relevant receipts when so required
by the Lender.
|
|
12.10
|
Guarantees.
It
shall ensure that any guarantees required by a protection and indemnity
or
war risks association are promptly issued and remain in full force
and
effect.
|
|
12.11
|
Compliance
with terms of insurances.
It
shall not do nor omit to do (nor permit to be done or not to be done)
any
act or thing which would or might render any obligatory insurance
invalid,
void, voidable or unenforceable or render any sum payable under an
obligatory insurance repayable in whole or in part; and, in
particular:
|
|
(a)
|
it
shall take all necessary action and comply with all requirements
which may
from time to time be applicable to the obligatory insurances, and
(without
limiting the obligation contained in Clause 12.7
(c)) ensure that the obligatory insurances are not made subject to
any
exclusions or qualifications to which the Lender has not given its
prior
approval;
|
|
(b)
|
it
shall not make any changes relating to the classification or
classification society or manager or operator of the Ship owned by
it
approved by the underwriters of the obligatory
insurances;
|
|
(c)
|
it
shall make (and promptly supply copies to the Lender of) all quarterly
or
other voyage declarations which may be required by the protection
and
indemnity risks association in which the Ship owned by it is entered
to
maintain cover for trading to the United States of America and Exclusive
Economic Zone (as defined in the United States Oil Pollution Act
1990 or
any other applicable legislation);
and
|
|
(d)
|
it
shall not employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the
insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
|
|
12.12
|
Alteration
to terms of insurances.
it
shall not make nor agree to any alteration to the terms of any obligatory
insurance nor waive any right relating to any obligatory insurance.
|
|
12.13
|
Settlement
of claims.
It
shall not settle, compromise or abandon any claim under any obligatory
insurance for Total Loss or for a Major Casualty, and it shall do
all
things necessary and provide all documents, evidence and information
to
enable the Lender to collect or recover any moneys which at any time
become payable in respect of the obligatory
insurances.
|
|
12.14
|
Provision
of copies of communications.
It
shall provide the Lender and, if the Lender so requests, at the time
of
each such communication, copies of all written communications between
that
Borrower and:
|
|
(a)
|
the
approved brokers; and
|
|
(b)
|
the
approved protection and indemnity and/or war risks associations;
and
|
|
(c)
|
the
approved insurance companies and/or underwriters, which relate directly
or
indirectly to:
|
|
(i)
|
that
Borrower's obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; and
|
|
(ii)
|
any
credit arrangements made between that Borrower and any of the persons
referred to in paragraphs (a) or (b) relating wholly or partly to
the
effecting or maintenance of the obligatory
insurances.
|
|
12.15
|
Provision
of information.
In
addition, it shall promptly provide the Lender (or any persons which
it
may designate) with any information which the Lender (or any such
designated person) requests for the purpose
of:
|
|
(a)
|
obtaining
or preparing any report from an independent marine insurance broker
as to
the adequacy of the obligatory insurances effected or proposed
to be
effected; and/or
|
|
(b)
|
effecting,
maintaining or renewing any such insurances as are referred to in
Clause
12.16 below or dealing with or considering any matters relating to
any
such insurances;
|
and
it
shall, forthwith upon demand, indemnify the Lender in respect of all fees
and
other
expenses incurred by or for the account of the Lender in connection with any
such report as is referred to in paragraph (a).
|
12.16
|
Mortgagee's
interest, additional perils insurances.
The Lender shall be entitled from time to time to effect, maintain
and
renew a mortgagee’s interest marine insurance and a mortgagee’s interest
additional perils insurance providing for the indemnification of
the
Lender against, among other things, any possible losses or other
consequences of any Environmental Claim, including the risk of
expropriation, arrest or any form of detention of any Ship, the imposition
of any Security Interest over any Ship and/or any other matter capable
of
being insured against under a mortgagee's interest additional perils
policy whether or not similar to the foregoing and otherwise for
an amount
equal to 110 per cent. of the Loan, on such terms, through such insurers
and generally in such manner as the Lender may from time to time
consider
appropriate and the Borrowers shall upon demand fully indemnify the
Lender
in respect of all premiums and other expenses which are incurred
in
connection with or with a view to effecting, maintaining or renewing
any
such insurance or dealing with, or considering, any matter arising
out of
any such insurance.
|
|
12.17
|
Review
of insurance requirements.
The Lender shall be entitled to review the requirements of this Clause
12
from time to time, but not more than once in any 12 month period
or at
such times as the approved brokers through which, and/or the protection
and indemnity and/or war risks associations in which, any Ship is
insured
or entered shall change, in order to take account of any changes
in
circumstances after the date of this Agreement which are, in the
opinion
of the Lender, significant and capable of affecting either Borrower
or
either Ship and its or their insurance (including, without limitation,
changes in the availability or the cost of insurance coverage or
the risks
to which either Borrower may be
subject.)
|
|
13
|
SHIP
COVENANTS
|
|
13.1
|
General.
Each Borrower also undertakes with the Lender to comply with the
following
provisions of this Clause 13
in
respect of the Ship owned by it at all times during the Security
Period
(after such Ship has been delivered to it under the relevant MOA)
except
as the Lender may otherwise permit.
|
|
13.2
|
Ship's
name and registration.
It
shall keep the Ship owned by it registered in its name as a Bahamas
ship
flagged at the port of Nassau; it shall not do or allow to be done
anything as a result of which such registration might be cancelled
or
imperilled; and it shall not change the name or port of registry
of the
Ship owned by it.
|
|
13.3
|
Repair
and classification.
It
shall keep the Ship owned by it in a good and safe condition and
state of
repair:
|
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
|
(b)
|
so
as to maintain that Ship's class as the highest possible class with
a
classification society which the Lender shall approve, free of all
overdue
recommendations and conditions; and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in the Bahamas or to vessels trading to any
jurisdiction to which that Ship may trade from time to time including
but
not limited to the ISM Code and the ISPS
Code;
|
|
13.4
|
Classification
society undertaking.
If
requested to do so by the Lender, it shall instruct the classification
society referred to in Clause 13.3
(and shall use its best endeavours to procure that the classification
society undertakes with the Lender or, to the extent that the
classification society will not give such undertakings, shall use
its best
endeavours itself to comply with the undertakings referred to in
paragraphs (a) to (d) below):
|
|
(a)
|
to
send to the Lender, following receipt of a written request from the
Lender, certified true copies of all original class records held
by the
classification society in relation to the Ship owned by
it;
|
|
(b)
|
to
allow the Lender (or its agents), at any time and from time to time,
to
inspect the original class and related records of that Borrower and
the
Ship owned by it at the offices of the classification society and
to take
copies of them;
|
|
(c)
|
to
notify the Lender immediately in writing if the classification
society:
|
|
(i)
|
receives
notification from that Borrower or any other person that that Ship's
classification society is to be changed;
or
|
|
(ii)
|
becomes
aware of any facts or matters which may result in or have resulted
in a
change, suspension, discontinuance, withdrawal or expiry of the Ship's
class under the rules or terms and conditions of that Borrower's
or that
Ship's membership of the classification
society;
|
|
(d)
|
following
receipt of a written request from the
Lender:
|
|
(i)
|
to
confirm that that Borrower is not in default of any of its contractual
obligations or liabilities to the classification society and, without
limiting the foregoing, that it has paid in full all fees or other
charges
due and payable to the classification society;
or
|
|
(ii)
|
if
that Borrower is in default of any of its contractual obligations
or
liabilities to the classification society, to specify to the Lender
in
reasonable detail the facts and circumstances of such default, the
consequences of such default, and any remedy period agreed or allowed
by
the classification society.
|
|
13.5
|
Modification.
It
shall not make any modification or repairs to, or replacement of,
the Ship
owned by it or equipment installed on that Ship which would or might
materially alter the structure, type or performance characteristics
of
that Ship or materially reduce its
value.
|
|
13.6
|
Removal
of parts.
It
shall not remove any material part of the Ship owned by it, or any
item of
equipment installed on that Ship, unless the part or item so removed
is
forthwith replaced by a suitable part or item which is in the same
condition as or better condition than the part or item removed, is
free
from any Security Interest or any right in favour of any person other
than
the Lender and becomes on installation on that Ship the property
of that
Borrower and subject to the security constituted by the Mortgage
Provided
that
that Borrower may install equipment owned by a third party if the
equipment can be removed without any risk of damage to that
Ship.
|
|
13.7
|
Surveys.
It
shall submit the Ship owned by it regularly to all periodical or
other
surveys which may be required for classification purposes and, if
so
required by the Lender provide the Lender, with copies of all survey
reports.
|
|
13.8
|
Inspection.
It
shall permit the Lender (by surveyors or other persons appointed
by it for
that purpose) to board the Ship owned by it at all reasonable times
to
inspect its condition or to satisfy themselves about proposed or
executed
repairs and shall afford all proper facilities for such inspections.
|
|
13.9
|
Prevention
of and release from arrest.
It
shall promptly discharge:
|
|
(a)
|
all
liabilities which give or may give rise to maritime or possessory
liens on
or claims enforceable against the Ship owned by it, its Earnings
or its
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship owned
by it,
its Earnings or its Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship owned by it, its
Earnings or its Insurances;
|
and,
forthwith upon receiving notice of the arrest of the Ship owned by it, or of
its
detention in exercise or purported
exercise of any lien or claim, that Borrower shall procure its release by
providing bail or
otherwise as the circumstances may require.
|
13.10
|
Compliance
with laws etc.
It
shall:
|
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, all Environmental
Laws and all other laws or regulations relating to the Ship owned
by it,
its ownership, operation and management or to the business of that
Borrower;
|
|
(b)
|
not
employ the Ship owned by it nor allow its employment in any manner
contrary to any law or regulation in any relevant jurisdiction including
but not limited to the ISM Code and the ISPS Code;
and
|
|
(c)
|
in
the event of hostilities in any part of the world (whether war is
declared
or not), not cause or permit the Ship owned by it to enter or trade
to any
zone which is declared a war zone by any government or by the Ship's
war
risks insurers unless the prior written consent of the Lender has
been
given and that Borrower has (at its expense) effected any special,
additional or modified insurance cover which the Lender may
require.
|
|
13.11
|
Provision
of information.
It
shall promptly provide the Lender with any information which it requests
regarding:
|
|
(a)
|
the
Ship owned by it, its employment, position and
engagements;
|
|
(b)
|
the
Earnings and payments and amounts due to the master and crew of the
Ship
owned by it;
|
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship owned by it and any
payments
made in respect of that Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
its
compliance, the Approved Managers’ or the compliance of the Ship owned by
it with the ISM Code and the ISPS
Code;
|
and,
upon
the Lender's request, provide copies of any current charter relating to the
Ship
owned by it, of any current charter guarantee and of that Ship’s Document of
Compliance.
|
13.12
|
Notification
of certain events.
It
shall immediately notify the Lender by fax, confirmed forthwith by
letter,
of:
|
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
|
(b)
|
any
occurrence as a result of which the Ship owned by it has become or
is, by
the passing of time or otherwise, likely to become a Total
Loss;
|
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
|
(d)
|
any
arrest or detention of the Ship owned by it, any exercise or purported
exercise of any lien on that Ship or its Earnings or any requisition
of
that Ship for hire;
|
|
(e)
|
any
intended dry docking of the Ship owned by
it;
|
|
(f)
|
any
Environmental Claim made against that Borrower or in connection with
the
Ship owned by it, or any Environmental
Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against
that
Borrower, the Approved Managers or otherwise in connection with the
Ship
owned by it;
|
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect
of which
will or could lead to the ISM Code and/or the ISPS Code not being
complied
with;
|
and
that
Borrower shall keep the Lender advised in writing on a regular basis and in
such
detail as the
Lender shall require of that Borrower's, the Approved Managers’
or any
other person's response to any of those events or matters.
|
13.13
|
Restrictions
on chartering, appointment of managers etc.
It
shall not, in relation to the Ship owned by
it:
|
|
(a)
|
let
that Ship on demise charter for any
period;
|
|
(b)
|
enter
into any time or consecutive voyage charter in respect of that Ship
for a
term which exceeds, or which by virtue of any optional extensions
may
exceed, 13 months (except for the relevant Time Charter or a Replacement
Time Charter;
|
|
(c)
|
enter
into any charter in relation to that Ship under which more than 2
months'
hire (or the equivalent) is payable in
advance;
|
|
(d)
|
charter
that Ship otherwise than on bona fide arm's length terms at the time
when
that Ship is fixed;
|
|
(e)
|
appoint
a manager of that Ship other than an Approved Manager or agree to
any
alteration to the terms of an Approved Manager’s
appointment;
|
|
(f)
|
de-activate
or lay up that Ship;
|
In
addition, that Borrower shall advise the Lender promptly after that Ship is
put
into the possession of any person for the purpose of work being done upon her
in
an amount exceeding or likely to exceed $500,000 (or the equivalent in any
other
currency) and shall also procure that at all times sums due to each such person
are paid when due so that no such person shall exercise any lien on that Ship
or
its Earnings for the cost of such work or for any other reason.
|
13.14
|
Notice
of Mortgage.
It
shall keep the Mortgage registered against the Ship owned by it as
a valid
first priority mortgage, carry on board that Ship a certified copy
of the
Mortgage and place and maintain in a conspicuous place in the navigation
room and the Master's cabin of that Ship a framed printed notice
stating
that that Ship is mortgaged by that Borrower to the
Lender.
|
|
13.15
|
Sharing
of Earnings.
It
shall not enter into any agreement or arrangement for the sharing
of any
Earnings.
|
|
14
|
SECURITY
COVER
|
|
14.1
|
Minimum
required security cover.
Clause 14.2 applies if (after a Ship has been delivered to a Borrower
under the relevant MOA) the Lender notifies the Borrowers
that:
|
|
(a)
|
the
aggregate of the market value (determined as provided in Clause 14.3)
of
the Ships; plus
|
|
(b)
|
the
net realisable value of any additional security previously provided
under
this Clause 14;
|
is
below
110 per cent. of the Loan (or 125 per cent. after the date falling 6 months
prior to the end of the Time Charter Period for either Ship unless and until
the
relevant Ship has been delivered to the charterer under a Replacement Time
Charter).
|
14.2
|
Provision
of additional security; prepayment.
If
the Lender serves a notice on the Borrowers under Clause 14.1, the
Borrowers shall, within 1 month after the date on which the Lender's
notice is served, either:
|
|
(a)
|
provide,
or ensure that a third party provides cash, cash equivalents or any
other
additional security which, in the opinion of the Lender, has a net
realisable value at least equal to the shortfall and is documented
in such
terms as the Lender may approve or require;
or
|
|
(b)
|
prepay
such part (at least) of the Loan as will eliminate the
shortfall.
|
|
14.3
|
Valuation
of Ships.
The market value of a Ship at any date is that shown by the average
of 2
valuations each prepared:
|
|
(a)
|
as
at a date not more than 14 days
previously;
|
|
(b)
|
by
an independent sale and purchase shipbroker which the Lender has
approved
or appointed for the purpose;
|
|
(c)
|
with
or without physical inspection of the Ship (as the Lender may
require);
|
|
(d)
|
on
the basis of a sale for prompt delivery for cash on normal arm's
length
commercial terms as between a willing seller and a willing buyer,
free of
any existing charter or other contract of
employment;
|
|
(e)
|
after
deducting the estimated amount of the usual and reasonable expenses
which
would be incurred in connection with the sale.
|
|
14.4
|
Value
of additional vessel security.
The net realisable value of any additional security which is provided
under Clause 14.2 and which consists of a Security Interest over
a vessel
shall be that shown by a valuation complying with the requirements
of
Clause 14.3.
|
|
14.5
|
Valuations
binding.
Any valuation under Clause 14.2, 14.3 or 14.4 shall be binding and
conclusive as regards the Borrowers, as shall be any valuation which
the
Lender makes of any additional security which does not consist of
or
include a Security Interest.
|
|
14.6
|
Provision
of information.
The Borrowers shall promptly provide the Lender and any shipbroker
or
expert acting under Clause 14.3 or 14.4 with any information which
the
Lender or the shipbroker or expert may request for the purposes of
the
valuation; and, if the Borrowers fail to provide the information
by the
date specified in the request, the valuation may be made on any basis
and
assumptions which the shipbroker or the Lender (or the expert appointed
by
it) considers prudent.
|
|
14.7
|
Payment
of valuation expenses.
Without prejudice to the generality of the Borrowers’ obligations under
Clauses 19.2, 19.3 and 20.3, the Borrowers shall, on demand, pay
the
Lender the amount of the fees and expenses of any shipbroker or expert
instructed by the Lender under this Clause 14 (but not more often
than
once in any period of 12 months unless an Event of Default has occurred)
and all legal and other expenses incurred by the Lender in connection
with
any matter arising out of this
Clause.
|
|
14.8
|
Application
of prepayment.
Clause 7 shall apply in relation to any prepayment pursuant to Clause
14.2(b).
|
|
15
|
PAYMENTS
AND CALCULATIONS
|
|
15.1
|
Currency
and method of payments.
All payments to be made by the Borrowers to the Lender under a
Finance
Document shall be made to the
Lender:
|
|
(a)
|
by
not later than 11.00 a.m. (New York City time) on the due
date;
|
|
(b)
|
in
same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled
in
such other manner as the Lender shall specify as being customary
at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
and
|
|
(c)
|
to
such account of the Lender as the Lender may from time to time notify
to
the Borrowers.
|
|
15.2
|
Payment
on non-Business Day.
If
any payment by the Borrowers under a Finance Document would otherwise
fall
due on a day which is not a Business
Day:
|
|
(a)
|
the
due date shall be extended to the next succeeding Business Day;
or
|
|
(b)
|
if
the next succeeding Business Day falls in the next calendar month,
the due
date shall be brought forward to the immediately preceding Business
Day;
|
and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original
due date.
|
15.3
|
Basis
for calculation of periodic payments.
All interest and commitment fee and any other payments under any
Finance
Document which are of an annual or periodic nature shall accrue from
day
to day and shall be calculated on the basis of the actual number
of days
elapsed and a 360 day year.
|
|
15.4
|
Lender
accounts.
The Lender shall maintain an account showing the amounts advanced
by the
Lender and all other sums owing to the Lender from the Borrowers
and each
Security Party under the Finance Documents and all payments in
respect of
those amounts made by the Borrowers and any Security
Party.
|
|
15.5
|
Accounts
prima facie evidence.
If
the account maintained under Clauses 15.4
shows an amount to be owing by the Borrowers or a Security Party
to the
Lender be prima facie evidence that that amount is owing to the
Lender.
|
|
16
|
APPLICATION
OF RECEIPTS
|
|
16.1
|
Normal
order of application.
Except as any Finance Document may otherwise provide, any sums
which are
received or recovered by the Lender under or by virtue of any Finance
Document shall be applied:
|
|
(a)
|
FIRST:
in or towards satisfaction of any amounts then due and payable under
the
Finance Documents (or any of them) and the Master Agreements (or
either of
them) in such order of application and/or such proportions as the
Lender
may specify by notice to the Borrowers and the Security
Parties;
|
|
(b)
|
SECONDLY:
in retention of an amount equal to any amount not then due and payable
under any Finance Document or the Master Agreements (or either of
them)
but which the Lender, by notice to the Borrowers and the Security
Parties,
states in its opinion will or may become due and payable in the future
and, upon those amounts becoming due and payable, in or towards
satisfaction of them in accordance with the provisions of this Clause;
and
|
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrowers or to any other person
appearing to be entitled to it.
|
|
16.2
|
Appropriation
rights overridden.
This Clause 16
shall override any right of appropriation possessed, and any appropriation
made, by any Borrowers or any Security
Party.
|
|
17
|
APPLICATION
OF EARNINGS
|
|
17.1
|
Payment
of Earnings.
Each Borrower undertakes with the Lender to ensure that, throughout
the
Security Period (and subject only to the provisions of the Deeds
of
Covenant), all the Earnings of the Ship owned by it are paid to the
relevant Earnings Account.
|
|
17.2
|
Monthly
retentions.
The Borrowers undertake with the Lender to ensure that, in each
calendar
month of the Security Period after the relevant Ship has been delivered
to
a Borrower, on such dates as the Lender may from time to time specify,
there is transferred to each Retention Account out of the Earnings
received in the relevant Earnings Account during the preceding
calendar
month:
|
|
(a)
|
one-sixth
of the amount of the repayment instalment relating to the relevant
Advance
falling due under Clause 7
on
the next applicable Repayment Date;
and
|
|
(b)
|
the
relevant fraction of the aggregate amount of interest on the relevant
Advance which is payable on the next due date for payment of interest
on
that Advance under this Agreement.
|
The
“relevant
fraction”
is a
fraction of which the numerator is 1 and the denominator the number of months
comprised in the then current Interest Period applicable to that Advance (or,
if
the period is shorter, the number of months from the later of the commencement
of the current Interest Period or the last due date for payment of interest
to
the next due date for payment of interest on that Advance under this
Agreement).
|
17.3
|
Shortfall
in Earnings.
If
the aggregate Earnings received in the relevant Earnings Account
are
insufficient in any month for the required amounts to be transferred
to a
Retention Account under Clause 17.2,
the Borrowers shall make up the amount of the insufficiency on demand
from
the Lender; but, without thereby prejudicing the Lender's right to
make
such demand at any time, the Lender may permit the Borrowers to make
up
all or part of the insufficiency by increasing the amount of any
transfer
under Clause 17.2
from the Earnings received in the next or subsequent
months.
|
|
17.4
|
Application
of retentions.
Until an Event of Default or a Potential Event of Default occurs,
the
Lender shall on each Repayment Date and on each due date for the
payment
of interest under this Agreement apply in accordance with Clause
15.1
so
much of the balance on the relevant Retention Account as
equals:
|
|
(a)
|
the
repayment instalment due on that Repayment Date; or
|
|
(b)
|
the
amount of interest payable on that interest payment
date;
|
in
discharge of the Borrowers’ liability for that repayment instalment or that
interest.
|
17.5
|
Interest
accrued on Retention Accounts.
Any credit balance on a Retention Account and shall bear interest
at the
rate from time to time offered by the Lender to its customers for
Dollar
deposits of similar amounts and for periods similar to those for
which
such balances appear to the Lender likely to remain on that Retention
Account.
|
|
17.6
|
Release
of accrued interest.
Interest accruing under Clause 17.5
shall be released to the Borrowers on each Repayment Date unless
an Event
of Default or a Potential Event of Default has occurred or the then
credit
balance on the relevant Retention Account is less than what would
have
been the balance had the full amount required by Clause 17.2
(and Clause 17.3,
if applicable) been transferred in that and each previous month.
|
|
17.7
|
Location
of accounts.
The Borrowers shall promptly :
|
|
(a)
|
comply
with any requirement of the Lender as to the location or re-location
of
the Retention Accounts and the Earnings
Accounts;
|
|
(b)
|
execute
any documents which the Lender specifies to create or maintain in
favour
of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Retention Accounts
and
the Earnings Accounts.
|
|
17.8
|
Debits
for expenses etc.
The Lender shall be entitled (but not obliged) from time to time
to debit
either Retention Account or either Earnings Account without prior
notice
in order to discharge any amount due and payable to it under Clause
19
or
20
or
payment of which it has become entitled to demand under Clause
19
or
20.
|
|
17.9
|
Borrower's
obligations unaffected.
The provisions of this Clause 17
(as distinct from a distribution effected under Clause 17.4)
do not affect:
|
|
(a)
|
the
liability of either Borrower to make payments of principal and interest
on
the due dates; or
|
|
(b)
|
any
other liability or obligation of either Borrower or any Security
Party
under any Finance Document.
|
|
18
|
EVENTS
OF DEFAULT
|
|
18.1
|
Events
of Default.
An
Event of Default occurs if:
|
|
(a)
|
either
Borrower or any Security Party fails to pay when due or (if payable
on
demand) within 3 Business Days of demand any sum payable under
a Finance
Document or under any document relating to a Finance Document;
however,
such failure shall not constitute an Event of Default
if:
|
|
(i)
|
such
failure is due to a bank payment transmission error;
and
|
|
(ii)
|
such
failure is remedied within 2 Business Days of notice from the Lender
requiring the relevant person to do so;
or
|
|
(b)
|
any
breach occurs of Clause 8.2,
10.2,
10.3,
11.2,
11.3
or
14.2 or of clause 10.2 and 11.13 of the Guarantee;
or
|
|
(c)
|
any
breach by either Borrower or any Security Party occurs of any provision
of
a Finance Document (other than a breach covered by paragraph (a)
or
(b))
unless, in the opinion of the Lender, such default is capable of
remedy
and such default is remedied within 15 Business Days after written
notice
from the Lender requesting action to remedy the same;
or
|
|
(d)
|
(subject
to any applicable grace period specified in any Finance Document)
any
breach by any Borrowers or any Security Party occurs of any provision
of a
Finance Document (other than a breach covered by paragraph (a),
(b)
or
(c));
or
|
|
(e)
|
any
representation, warranty or statement made by, or by an officer of,
a
Borrower or the Guarantor in a Finance Document or in any Drawdown
Notice
or any other notice or document relating to a Finance Document is
untrue
or misleading when it is made; or
|
|
(f)
|
any
of the following occurs in relation to any Financial Indebtedness
of a
Relevant Person (in respect of a sum of, or sums aggregating, $500,000
in
the case of the Guarantor):
|
|
(i)
|
any
Financial Indebtedness of a Relevant Person is not paid when due
or, if so
payable, on demand; or
|
|
(ii)
|
any
Financial Indebtedness of a Relevant Person becomes due and payable
or
capable of being declared due and payable prior to its stated maturity
date as a consequence of any event of default;
or
|
|
(iii)
|
a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or
owner or
becomes capable of being terminated as a consequence of any termination
event; or
|
|
(iv)
|
any
overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other
derivative contract or transaction, relating to any Financial Indebtedness
of a Relevant Person ceases to be available or becomes capable of
being
terminated as a result of any event of default, or cash cover is
required,
or becomes capable of being required, in respect of such a facility
as a
result of any event of default; or
|
|
(v)
|
any
Security Interest securing any Financial Indebtedness of a Relevant
Person
becomes enforceable; or
|
|
(g)
|
any
of the following occurs in relation to a Borrower or the
Guarantor:
|
|
(i)
|
it
becomes, in the opinion of the Lender, unable to pay its debts as
they
fall due; or
|
|
(ii)
|
any
of its assets are subject to any form of execution, attachment, arrest,
sequestration or distress and shall not have been released within
7
Business Days; or
|
|
(iii)
|
an
administrator is appointed (whether by the court or otherwise) in
respect
of a Borrower or the Guarantor; or
|
|
(iv)
|
any
formal declaration of bankruptcy or any formal statement to the effect
that a Borrower or the Guarantor is insolvent or likely to become
insolvent is made by such company or by its directors or, in any
proceedings, by a lawyer acting for such company; or
|
|
(v)
|
a
provisional liquidator is appointed in respect of a Borrower or the
Guarantor, a winding-up order is made in relation to a Borrower or
the
Guarantor or a winding-up resolution is passed by a Borrower or the
Guarantor; or
|
|
(vi)
|
a
resolution is passed, an administration notice is given or filed,
an
application or petition to a court is made or presented or any other
step
is taken by (aa) a Borrower or the Guarantor, (bb) the members or
directors of a Borrower or the Guarantor, (cc) a holder of Security
Interests which together relate to all or substantially all of the
assets
of a Borrower or the Guarantor, or (dd) a government minister or
public or
regulatory authority of a Pertinent Jurisdiction for or with a view
to the
winding up of a Borrower or the Guarantor or for the appointment
of a
provisional liquidator or administrator in respect of a Borrower
or the
Guarantor or a Borrower or the Guarantor ceases payments to creditors
generally save that this paragraph does not apply to a fully solvent
winding-up of a Borrower or the Guarantor which is, or is to be,
effected
for the purposes of an amalgamation or reconstruction previously
approved
by the Lender; or
|
|
(vii)
|
an
administration notice is given or filed, an application or petition
to a
court is made or presented or any other step is taken by a creditor
of a
Borrower or the Guarantor for the winding-up of a Borrower or the
Guarantor or the appointment of a provisional liquidator or administrator
in respect of a Borrower or the Guarantor in any Pertinent Jurisdiction,
unless the proposed winding-up, appointment of a provisional liquidator
or
administration is being contested in good faith, on substantial grounds
and not with a view to some other insolvency law procedure being
implemented instead and either (aa) the application or petition is
dismissed or withdrawn within 30 days of being made or presented,
or (bb)
within 30 days of the administration notice being given or filed,
or the
other relevant steps being taken, other action is taken which will
ensure
that there will be no administration and (in both cases (aa) or (bb))
the
Borrower concerned or the Guarantor will continue to carry on business
in
the ordinary way and without being the subject of any actual, interim
or
pending insolvency law procedure;
or
|
|
(viii)
|
a
Borrower or the Guarantor or its directors take any steps (whether
by
making or presenting an application or petition to a court, or submitting
or presenting a document setting out a proposal or proposed terms,
or
otherwise) with a view to obtaining any form of moratorium, suspension
or
deferral of payments, reorganisation of debt (or certain debt) or
arrangement with all or a substantial proportion (by number or value)
of
creditors or of any class of them or any such moratorium, suspension
or
deferral of payments, reorganisation or arrangement is effected by
court
order, by the filing of documents with a court, by means of a contract
or
in any other way at all; or
|
|
(ix)
|
in
a Pertinent Jurisdiction other than England, any event occurs or
any
procedure is commenced which, in the opinion of the Lender, is similar
to
any of the foregoing; or
|
|
(h)
|
a
Borrower or the Guarantor ceases or suspends carrying on its business
or a
part of its business which, in the opinion of the Lender, is material
in
the context of this Agreement; or
|
|
(i)
|
it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
|
|
(i)
|
for
a Borrower or any Security Party to discharge any liability under
a
Finance Document or to comply with any other obligation which the
Lender
considers material under a Finance Document;
or
|
|
(ii)
|
for
the Lender to exercise or enforce any right under, or to enforce
any
Security Interest created by, a Finance Document;
or
|
|
(j)
|
any
consent necessary to enable a Borrower to own, operate or charter
the Ship
owned by it or to enable a Borrower or any Security Party to comply
with
any provision which the Lender considers material of a Finance Document
or
an MOA to which that Borrower is a party is not granted, expires
without
being renewed, is revoked or becomes liable to revocation or any
condition
of such a consent is not fulfilled; or
|
|
(k)
|
the
Lender reasonably believes that, without its prior consent, a change
has
occurred after the date of this Agreement in the ultimate beneficial
ownership of any of the shares in either Borrower or in the ultimate
control of the voting rights attaching to any of those shares;
or
|
|
(l)
|
any
provision of a Finance Document which the Lender reasonably considers
material proves to have been or becomes invalid or unenforceable,
or a
Security Interest created by a Finance Document proves to have been
or
becomes invalid or unenforceable or such a Security Interest proves
to
have ranked after, or loses its priority to, another Security Interest
or
any other third party claim or interest;
or
|
|
(m)
|
the
security constituted by a Finance Document is in any way imperilled
or in
jeopardy; or
|
|
(n)
|
an
“Event of Default” as defined in section 14 of either Master Agreement
occurs; or
|
|
(o)
|
any
other event occurs or any other circumstances arise or develop including,
without limitation:
|
|
(i)
|
a
change in the financial position, state of affairs or prospects of
either
Borrower or the Guarantor; or
|
|
(ii)
|
any
accident or other event involving a Ship or another vessel owned,
chartered or operated by a Relevant
Person;
|
in
the
light of which the Lender reasonably considers that there is a significant
risk
that a Borrower or the Guarantor is, or will later become, unable to discharge
its liabilities under the Finance Documents and the Master Agreements as they
fall due.
|
18.2
|
Actions
following an Event of Default.
On, or at any time after, the occurrence of an Event of Default the
Lender
may:
|
|
(a)
|
serve
on the Borrowers a notice stating that all obligations of the Lender
to
the Borrowers under this Agreement are terminated;
and/or
|
|
(b)
|
serve
on the Borrowers a notice stating that the Loan, all accrued interest
and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
|
|
(c)
|
take
any other action which, as a result of the Event of Default or
any notice
served under paragraph (a) or (b), the Lender is entitled to take
under
any Finance Document or any applicable
law.
|
|
18.3
|
Termination
of obligations.
On
the service of a notice under Clause 18.2(a),
all the obligations of the Lender to the Borrowers under this Agreement
shall terminate.
|
|
18.4
|
Acceleration
of Loan.
On
the service of a notice under Clause 18.2(b),
the Loan, all accrued interest and all other amounts accrued or
owing from
the Borrowers or any Security Party under this Agreement and every
other
Finance Document shall become immediately due and payable or, as
the case
may be, payable on demand.
|
|
18.5
|
Multiple
notices; action without notice.
The Lender may serve notices under Clause 18.2(a)
and (b) simultaneously or on different dates and it may take any
action
referred to in Clause 18.2 if no such notice is served or simultaneously
with or at any time after the service of both or either of such
notices.
|
|
18.6
|
Exclusion
of Lender liability.
Neither the Lender nor any receiver or manager appointed by the Lender,
shall have any liability to the Borrowers or a Security
Party:
|
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of
a
Security Interest created by, a Finance Document or by any failure
or
delay to exercise such a right or to enforce such a Security Interest;
or
|
|
(b)
|
as
mortgagee in possession or otherwise, for any income or principal
amount
which might have been produced by or realised from any asset comprised
in
such a Security Interest or for any reduction (however caused) in
the
value of such an asset;
|
except
that this does not exempt the Lender or a receiver or manager from liability
for
losses shown to have been caused directly and mainly by the dishonesty or the
wilful misconduct of the Lender's own officers and
employees or ( as the case may be) such receiver's or manager's own partners
or
employees.
|
18.7
|
Relevant
Persons.
In
this Clause 18
a
“Relevant
Person”
means a Borrower, the Guarantor and any company which is a subsidiary
of a
Borrower or the Guarantor or of which a Borrower or the Guarantor
is a
subsidiary; but excluding any company which is dormant and the value
of
whose gross assets is $50,000 or less.
|
|
18.8
|
Interpretation.
In
Clause 18.1(f)
references to an event of default or a termination event include
any
event, howsoever described, which is similar to an event of default
in a
facility agreement or a termination event in a finance lease; and
in
Clause 18.1(g)“petition”
includes an application.
|
|
19
|
FEES
AND EXPENSES
|
|
19.1
|
Arrangement
fee.
The Borrowers shall pay to the Lender, on the date of this Agreement,
the
arrangement fee specified in the Commitment
Letter.
|
|
19.2
|
Commitment
fee.
The Borrowers shall pay to the Lender
,
quarterly in arrears during the period from (and including) the date
of
the Commitment Letter to the earlier of (i) the second Drawdown Date
and
(ii) the end of the Availability Period, a commitment fee (the
“Commitment Fee”)
at the rate of 0.30 per cent. per annum on the undrawn amount of
the
Commitment. If the Commitment is drawn or cancelled in full within
a
period of not more than 60 days from the date of the Commitment Letter,
the Commitment Fee shall be waived by the Lender.
|
|
19.3
|
Costs
of negotiation, preparation etc.
The Borrowers shall pay to the Lender on its demand the amount of
all
expenses incurred by the Lender (including legal expenses actually
incurred) in connection with the negotiation, preparation, execution
or
registration of any Finance Document or any related document or with
any
transaction contemplated by a Finance Document or a related
document.
|
|
19.4
|
Costs
of variation, amendments, enforcement etc.
The Borrowers shall pay to the Lender, on the Lender's demand,
the amount
of all expenses incurred by the Lender (including legal expenses
actually
incurred) in connection with:
|
|
(a)
|
any
amendment or supplement to a Finance Document, or any proposal for
such an
amendment to be made;
|
|
(b)
|
any
consent or waiver by the Lender concerned under or in connection
with a
Finance Document, or any request for such a consent or
waiver;
|
|
(c)
|
the
valuation of any security provided or offered under Clause 14
or
any other matter relating to such security;
or
|
|
(d)
|
any
step taken by the Lender with a view to the protection, exercise
or
enforcement of any right or Security Interest created by a Finance
Document or for any similar
purpose.
|
There
shall be recoverable under paragraph (d)
the full
amount of all legal expenses incurred, whether or not
such as
would be allowed under rules of court or any taxation or other procedure carried
out under such rules.
|
19.5
|
Documentary
taxes.
The Borrowers shall promptly pay any tax payable on or by reference
to any
Finance Document, and shall, on the Lender's demand, fully indemnify
the
Lender against any claims, expenses, liabilities and losses resulting
from
any failure or delay by the Borrowers to pay such a
tax.
|
|
19.6
|
Financial
Services Authority fees.
The Borrowers shall pay to the Lender, on the Lender’s demand, the amounts
which the Lender from time to time notifies the Borrowers to be necessary
to compensate it for the cost attributable to the Loan resulting
from the
imposition from time to time under or pursuant to the Bank of England
Act
1998 and/or by the Bank of England and/or by the Financial Services
Authority (or other United Kingdom governmental authorities or agencies)
of a requirement to pay fees to the Financial Services Authority
calculated by reference to liabilities used to fund the
Loan.
|
|
19.7
|
Certification
of amounts.
A
notice which is signed by 2 officers of the Lender, which states
that a
specified amount, or aggregate amount, is due to the Lender under
this
Clause 19
and which indicates (without necessarily specifying a detailed breakdown)
the matters in respect of which the amount, or aggregate amount,
is due
shall be prima facie evidence that the amount, or aggregate amount,
is
due.
|
|
20
|
INDEMNITIES
|
|
20.1
|
Indemnities
regarding borrowing and repayment of Loan.
The Borrowers shall fully indemnify the Lender on its demand in
respect of
all claims, expenses, liabilities and losses which are made or
brought
against or incurred by the Lender, or which the Lender reasonably
and with
due diligence estimates that it will incur, as a result of or in
connection with:
|
|
(a)
|
an
Advance not being borrowed on the date specified in the relevant
Drawdown
Notice for any reason other than a default by the Lender;
|
|
(b)
|
the
receipt or recovery of all or any part of the Loan or an overdue
sum
otherwise than on the last day of an Interest Period or other relevant
period applicable to it;
|
|
(c)
|
any
failure (for whatever reason) by the Borrowers to make payment of
any
amount due under a Finance Document on the due date or, if so payable,
on
demand (after giving credit for any default interest paid by the
Borrowers
on the amount concerned under Clause 6);
|
|
(d)
|
the
occurrence and/or continuance of an Event of Default or a Potential
Event
of Default and/or the acceleration of repayment of the Loan under
Clause
18;
|
and
in
respect of any tax (other than tax on its overall net income) for which the
Lender is liable in connection
with any amount paid or payable to the Lender (whether for its own account
or
otherwise) under any Finance Document.
|
20.2
|
Breakage
costs.
Without limiting its generality, Clause 20.1
covers any claim, expense, liability or loss, including a loss of
a
prospective profit, incurred by the Lender in liquidating or employing
deposits from third parties acquired or arranged to fund or maintain
all
or any part of the Loan and/or any overdue amount (or an aggregate
amount
which includes the Loan or any overdue amount).
|
|
20.3
|
Miscellaneous
indemnities.
The Borrowers shall fully indemnify the Lender on its demand in respect
of
all claims, expenses, liabilities and losses which may be made or
brought
against or incurred by the Lender, in any country, as a result of
or in
connection with:
|
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Lender or by any receiver appointed
under
a Finance Document;
|
|
(b)
|
any
other Pertinent Matter;
|
other
than claims, expenses, liabilities and losses which are shown to have been
directly and mainly caused by the gross negligence or wilful misconduct of
the
officers or employees of the Lender.
Without
prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection
with
any law relating to safety at sea, any Environmental Incident, the ISM Code,
the
ISPS Code or any Environmental Law.
|
20.4
|
Currency
indemnity.
If
any sum due from either Borrower or any Security Party to the Lender
under
a Finance Document or under any order or judgment relating to a Finance
Document has to be converted from the currency in which the Finance
Document provided for the sum to be paid (the “Contractual
Currency”)
into another currency (the “Payment
Currency”)
for the purpose of:
|
|
(a)
|
making
or lodging any claim or proof against any Borrower or any Security
Party,
whether in its liquidation, any arrangement involving it or otherwise;
or
|
|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
|
|
(c)
|
enforcing
any such order or judgment;
|
the
Borrowers shall indemnify the Lender against the loss arising when the amount
of
the payment actually received by the Lender is converted at the available rate
of exchange into the Contractual Currency.
In
this
Clause 20.4, the “available
rate of exchange”
means
the rate at which the Lender is able at the
opening of business (London time) on the Business Day after it receives the
sum
concerned to
purchase
the Contractual Currency with the Payment Currency.
This
Clause 20.4 creates a separate liability of the Borrowers which is distinct
from
its other
liabilities under the Finance Documents and which shall not be merged in any
judgment or order relating to those other liabilities.
|
20.5
|
Certification
of amounts.
A
notice which is signed by 2 officers of the Lender, which states
that a
specified amount, or aggregate amount, is due to the Lender under
this
Clause 20 and
which indicates (without necessarily specifying a detailed breakdown)
the
matters in respect of which the amount, or aggregate amount, is due
shall
be prima facie evidence that the amount, or aggregate amount, is
due.
|
|
20.6
|
Application
to Master Agreements.
For the avoidance of doubt, Clause 20.4 does not apply in respect
of sums
due from the Borrowers to the Lender under or in connection with
a Master
Agreement as to which sums the provisions of Section 8 (Contractual
Currency) of that Master Agreement shall
apply.
|
|
21
|
NO
SET-OFF OR TAX
DEDUCTION
|
|
21.1
|
No
deductions.
All amounts due from the Borrowers under a Finance Document shall
be
paid:
|
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(b)
|
free
and clear of any tax deduction except a tax deduction which a Borrower
is
required by law to make.
|
|
21.2
|
Grossing-up
for taxes.
If
a Borrower is required by law to make a tax deduction from any
payment:
|
|
(a)
|
that
Borrower shall notify the Lender as soon as it becomes aware of the
requirement;
|
|
(b)
|
that
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty
arises;
|
|
(c)
|
the
amount due in respect of the payment shall be increased by the amount
necessary to ensure that the Lender receives and retains (free from
any
liability relating to the tax deduction) a net amount which, after
the tax
deduction, is equal to the full amount which it would otherwise have
received.
|
|
21.3
|
Evidence
of payment of taxes.
Within 1 month after making any tax deduction, the Borrower concerned
shall deliver to the Lender documentary evidence satisfactory to
the
Lender that the tax had been paid to the appropriate taxation
authority.
|
|
21.4
|
Tax
credits.
If
the Lender receives for its own account a repayment or credit in
respect
of tax on account of which a Borrower has made an increased payment
under
Clause 21.2, it shall pay to that Borrower a sum equal to the proportion
of the repayment or credit which it allocates to the amount due from
that
Borrower in respect of which that Borrower made the increased payment,
provided however that:
|
|
(a)
|
the
Lender shall not be obliged to allocate to this transaction any part
of a
tax repayment or credit which is referable to a class or number of
transactions;
|
|
(b)
|
nothing
in this Clause 21.4 shall oblige the Lender to arrange its tax affairs
in
any particular manner, to claim any type of relief, credit, allowance
or
deduction instead of, or in priority to, another or to make any such
claim
within any particular time;
|
|
(c)
|
nothing
in this Clause 21.4 shall oblige the Lender to make a payment which
would
leave it in a worse position than it would have been in if the Borrower
concerned had not been required to make a tax deduction from a payment;
and
|
|
(d)
|
any
allocation or determination made by the Lender under or in connection
with
this Clause 21.4 shall be conclusive and binding on the
Borrowers.
|
|
21.5
|
Exclusion
of tax on overall net income.
In
this Clause 21“tax
deduction”
means any deduction or withholding for or on account of any present
or
future tax except tax on the Lender's overall net
income.
|
|
21.6
|
Application
to Master Agreement.
For the avoidance of doubt, this Clause 21 does not apply in respect
of
sums due from the Borrowers to the Lender under or in connection
with a
Master Agreement as to which sums the provisions of section 2(d)
(Deduction or Withholding of Tax) of that Master Agreement shall
apply.
|
|
22
|
ILLEGALITY,
ETC
|
|
22.1
|
Illegality.
This Clause 22
applies if the Lender notifies the Borrowers that it has become,
or will
with effect from a specified date,
become:
|
|
(a)
|
unlawful
or prohibited as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing
law is
or will be interpreted or applied; or
|
|
(b)
|
contrary
to, or inconsistent with, any
regulation,
|
for
the
Lender to maintain or give effect to any of its obligations under this Agreement
in the manner
contemplated by this Agreement.
|
22.2
|
Notification
and effect of illegality.
On
the Lender notifying the Borrowers under Clause 22.1,
the Lender's obligation to make any further Advances shall terminate;
and
thereupon or, if later, on the date specified in the Lender's notice
under
Clause 22.1
as
the date on which the notified event would become effective the Borrowers
shall prepay the Loan in full in accordance with Clause 7.
|
|
22.3
|
Mitigation.
If circumstances arise which would result in a notification under
Clause
22.1
then, without in any way limiting the rights of the Lender under
Clause
22.3,
the Lender shall use reasonable endeavours to transfer its obligations,
liabilities and rights under this Agreement and the Finance Documents
to
another office or financial institution not affected by the circumstances
but the Lender shall not be under any obligation to take any such
action
if, in its opinion, to do would or
might:
|
|
(a)
|
have
an adverse effect on its business, operations or financial condition;
or
|
|
(b)
|
involve
it in any activity which is unlawful or prohibited or any activity
that is
contrary to, or inconsistent with, any regulation;
or
|
|
(c)
|
involve
it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
|
|
23
|
INCREASED
COSTS
|
|
23.1
|
Increased
costs.
This Clause 23
applies if the Lender notifies the Borrowers that it considers
that as a
result of:
|
|
(a)
|
the
introduction or alteration after the date of this Agreement of a
law or an
alteration after the date of this Agreement in the manner in which
a law
is interpreted or applied (disregarding any effect which relates
to the
application to payments under this Agreement of a tax on the Lender's
overall net income); or
|
|
(b)
|
complying
with any regulation (including any which relates to capital adequacy
or
liquidity controls or which affects the manner in which the Lender
allocates capital resources to its obligations under this Agreement)
which
is introduced, or altered, or the interpretation or application of
which
is altered, after the date of this
Agreement,
|
the
Lender (or a parent company of it) has incurred or will incur an “increased
cost”.
|
23.2
|
Meaning
of “increased costs”.
In
this Clause 23, “increased
costs”
means:
|
|
(a)
|
an
additional or increased cost incurred as a result of, or in connection
with, the Lender having entered into, or being a party to, this Agreement
or having taken an assignment of rights under this Agreement, of
funding
or maintaining the Loan or performing its obligations under this
Agreement, or of having outstanding all or any part of the Loan or
other
unpaid sums; or
|
|
(b)
|
a
reduction in the amount of any payment to the Lender under this Agreement
or in the effective return which such a payment represents to the
Lender
or on its capital;
|
|
(c)
|
an
additional or increased cost of funding all or maintaining all or
any of
the advances comprised in a class of advances formed by or including
the
Loan or (as the case may require) the proportion of that cost attributable
to the Loan; or
|
|
(d)
|
a
liability to make a payment, or a return foregone, which is calculated
by
reference to any amounts received or receivable by the Lender under
this
Agreement;
|
but
not
an item attributable to a change in the rate of tax on the overall net income
of
the Lender (or a
parent
company of it) or an item covered by the indemnity for tax in Clause
20.1
or by
Clause 21
or an
item arising directly out of the implementation by the applicable authorities
having jurisdiction over the Lender of the matters set out in the statement
of
the Basle Committee on Banking Regulations and Supervisory Practices dated
July,
1988 and entitled “International Convergence of Capital Measurement and Capital
Standards”, to the extent and according to the timetable provided for in the
statement.
Without
prejudice to the generality of the foregoing any item attributable to the
implementation by the applicable authorities having jurisdiction over the Lender
of the matters set out in the revised framework on “International Convergence of
Capital Measurement and Capital Standards” (also known as “The Basle II Accord”)
shall be included within the meaning of “increased
costs”.
For
the
purposes of this Clause 23.2 the Lender may in good faith allocate or spread
costs and/or losses among its assets and liabilities (or any class of its assets
and liabilities) on such basis as it considers appropriate.
|
23.3
|
Payment
of increased costs.
The Borrowers shall pay to the Lender, on its demand, the amounts
which
the Lender from time to time notifies the Borrowers that it has specified
to be necessary to compensate it for the increased
cost.
|
|
23.4
|
Notice
of prepayment.
If
the Borrowers are not willing to continue to compensate the Lender
for the
increased cost under Clause 23.3, the Borrowers may give the Lender
not
less than 14 days' notice of its intention to prepay the Loan at
the end
of an Interest Period.
|
|
23.5
|
Prepayment.
A
notice under Clause 23.4 shall be irrevocable; and on the date specified
in its notice of intended prepayment, the Borrowers shall prepay
(without
premium or penalty) the Loan, together with accrued interest thereon
at
the applicable rate plus the applicable
Margin.
|
|
23.6
|
Application
of prepayment.
Clause 7
shall apply in relation to the
prepayment.
|
|
24
|
SET-OFF
|
|
24.1
|
Application
of credit balances.
Following the occurrence of and during the continuation of an Event
of
Default, the Lender may without prior
notice:
|
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to
the
credit of any account in the name of a Borrower at any office in
any
country of the Lender in or towards satisfaction of any sum then
due from
a Borrower to the Lender under any of the Finance Documents;
and
|
|
(b)
|
for
that purpose:
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of that
Borrower;
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance
into
Dollars;
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Lender considers appropriate.
|
|
24.2
|
Existing
rights unaffected.
The Lender shall not be obliged to exercise any of its rights under
Clause
24.1;
and those rights shall be without prejudice and in addition to any
right
of set-off, combination of accounts, charge, lien or other right
or remedy
to which the Lender is entitled (whether under the general law or
any
document).
|
|
24.3
|
No
Security Interest.
This Clause 24 gives the Lender a contractual right of set-off only,
and
does not create any equitable charge or other Security Interest over
any
credit balance of any Borrower.
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING
OFFICE
|
|
25.1
|
Transfer
by Borrowers.
Neither Borrower may transfer any of its rights, liabilities or
obligations under any Finance
Document.
|
|
25.2
|
Assignment
by Lender.
The Lender may assign all or any of the rights and interests which
it has
under or by virtue of the Finance Documents without the consent of
or any
notice to the Borrowers.
|
|
25.3
|
Rights
of assignee.
In
respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document, or any misrepresentation made in
or in
connection with a Finance Document, a direct or indirect assignee
of any
of the Lender's rights or interests under or by virtue of the Finance
Documents shall be entitled to recover damages by reference to the
loss
incurred by that assignee as a result of the breach or misrepresentation
irrespective of whether the Lender would have incurred a loss of
that kind
or amount.
|
|
25.4
|
Sub-participation;
subrogation assignment.
The Lender may sub-participate all or any part of its rights and/or
obligations under or in connection with the Finance Documents without
the
consent of or any notice to the Borrowers; and the Lender may assign,
in
any manner and terms agreed by it, all or any part of those rights
to an
insurer or surety who has become subrogated to
them.
|
|
25.5
|
Disclosure
of information.
The Lender may disclose to a potential assignee or sub-participant
any
information which the Lender has received in relation to any Borrower,
any
Security Party or their affairs under or in connection with any Finance
Document, unless the information is clearly of a confidential
nature.
|
|
25.6
|
Change
of lending office.
The Lender may change its lending office by giving notice to the
Borrowers
and the change shall become effective on the later
of:
|
|
(a)
|
the
date on which the Borrowers receive the notice;
and
|
|
(b)
|
the
date, if any, specified in the notice as the date on which the change
will
come into effect.
|
Where
any
change in the Lender’s lending office is made which results (or would result on
the basis of a change to applicable law or regulation affecting the Lender
which
has been announced at the time of the change and of which the Lender could
reasonably be expected to be aware) in amounts becoming due under Clauses 21
or
23 at that time (or, as the case may be, thereafter in accordance with the
relevant change in law or regulation), the Lender shall be entitled to receive
those amounts only to the extent that the Lender would have been so entitled
had
there been no change in its lending office.
|
26
|
VARIATIONS
AND WAIVERS
|
|
26.1
|
Variations,
waivers etc. by Lender.
A
document shall be effective to vary, waive, suspend or limit any
provision
of a Finance Document, or the Lender's rights or remedies under
such a
provision or the general law, only if the document is signed, or
specifically agreed to by fax, by the Borrowers and the Lender
and, if the
document relates to a Finance Document to which a Security Party
is party,
by that Security Party.
|
|
26.2
|
Exclusion
of other or implied variations.
Except for a document which satisfies the requirements of Clauses
26.1,
no document, and no act, course of conduct, failure or neglect to
act,
delay or acquiescence on the part of the Lender (or any person acting
on
its behalf) shall result in the Lender (or any person acting on its
behalf) being taken to have varied, waived, suspended or limited,
or being
precluded (permanently or temporarily) from enforcing, relying on
or
exercising:
|
|
(a)
|
a
provision of this Agreement or another Finance Document;
or
|
|
(b)
|
an
Event of Default; or
|
|
(c)
|
a
breach by any Borrower or a Security Party of an obligation under
a
Finance Document or the general law;
or
|
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law;
|
and
there
shall not be implied into any Finance Document any term or condition requiring
any such provision to be enforced, or such right or remedy to be exercised,
within a certain or reasonable time.
|
27
|
NOTICES
|
|
27.1
|
General.
Unless otherwise specifically provided, any notice under or in connection
with any Finance Document shall be given by letter or fax; and references
in the Finance Documents to written notices, notices in writing and
notices signed by particular persons shall be construed
accordingly.
|
|
27.2
|
Addresses
for communications.
A
notice shall be sent:
|
|
(a)
|
to
the Borrowers:
|
c/o
MC Shipping Inc.
|
|
|
00
Xxxxxx xx Xxxxxxxxxxx
|
|||
|
XX
Xxx 000 Xxxxxx
|
|||
|
Fax
No:
(00) 0 00 00 00 00
|
|||
|
Attention:
Xxxxxxxxx Xxxxxxx
|
|||
|
(b)
|
to
the Lender:
|
Scotia
House
|
|
|
00
Xxxxxxxx Xxxxxx
|
|||
|
Xxxxxx
|
|||
|
XX0X
0XX
|
|||
|
Xxxxxxx
|
|||
|
Fax
No: (00 0) 000 000 0000
|
or
to
such other address as the relevant party may notify the other.
|
27.3
|
Effective
date of notices.
Subject to Clauses 27.4
and 27.5:
|
|
(a)
|
a
notice which is delivered personally or posted shall be deemed to
be
served, and shall take effect, at the time when it is
delivered;
|
|
(b)
|
a
notice which is sent by fax shall be deemed to be served, and shall
take
effect, 2 hours after its transmission is
completed.
|
|
27.4
|
Service
outside business hours.
However, if under Clause 27.3
a
notice would be deemed to be
served:
|
|
(a)
|
on
a day which is not a business day in the place of receipt;
or
|
|
(b)
|
on
such a business day, but after 5 p.m. local
time;
|
the
notice shall (subject to Clause 27.5)
be
deemed to be served, and shall take effect, at 9 a.m. on the next day which
is
such a business day.
|
27.5
|
Illegible
notices.
Clauses 27.3
and 27.4
do
not apply if the recipient of a notice notifies the sender within
1 hour
after the time at which the notice would otherwise be deemed to be
served
that the notice has been received in a form which is illegible in
a
material respect.
|
|
27.6
|
Valid
notices.
A
notice under or in connection with a Finance Document shall not be
invalid
by reason that its contents or the manner of serving it do not comply
with
the requirements of this Agreement or, where appropriate, any other
Finance Document under which it is served
if:
|
|
(a)
|
the
failure to serve it in accordance with the requirements of this Agreement
or other Finance Document, as the case may be, has not caused any
party to
suffer any significant loss or prejudice;
or
|
|
(b)
|
in
the case of incorrect and/or incomplete contents, it should have
been
reasonably clear to the party on which the notice was served what
the
correct or missing particulars should have
been.
|
|
27.7
|
English
language.
Any notice under or in connection with a Finance Document shall be
in
English.
|
|
27.8
|
Meaning
of “notice”.
In
this Clause 28 “notice”
includes any demand, consent, authorisation, approval, instruction,
waiver
or other communication.
|
|
28
|
JOINT
AND SEVERAL
LIABILITY
|
|
28.1
|
General.
Except those pursuant to Clause 4.13 and 4.14, all liabilities and
obligations of the Borrowers under this Agreement shall, whether
expressed
to be so or not, be several and, if and to the extent consistent
with
Clause 28.2,
joint.
|
|
28.2
|
No
impairment of Borrower's obligations.
The liabilities and obligations of a Borrower shall not be impaired
by:
|
|
(a)
|
this
Agreement being or later becoming void, unenforceable or illegal
as
regards the other Borrower;
|
|
(b)
|
the
Lender entering into any rescheduling, refinancing or other arrangement
of
any kind with the other Borrower;
|
|
(c)
|
the
Lender releasing the other Borrower or any Security Interest created
by a
Finance Document; or
|
|
(d)
|
any
combination of the foregoing.
|
|
28.3
|
Principal
debtors.
Each Borrower declares that it is and will, throughout the Security
Period, remain a principal debtor for all amounts owing under this
Agreement and the Finance Documents and neither Borrower shall in
any
circumstances be construed to be a surety for the obligations of
the other
Borrower under this Agreement.
|
|
28.4
|
Subordination.
Subject to Clause 28.5,
during the Security Period, neither Borrower
shall:
|
|
(a)
|
claim
any amount which may be due to it from the other Borrower whether
in
respect of a payment made, or matter arising out of, this Agreement
or any
Finance Document, or any matter unconnected with this Agreement
or any
Finance Document; or
|
|
(b)
|
take
or enforce any form of security from the other Borrower for such
an
amount, or in any other way seek to have recourse in respect of such
an
amount against any asset of the other Borrower;
or
|
|
(c)
|
set
off such an amount against any sum due from it to the other Borrower;
or
|
|
(d)
|
prove
or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving the other Borrower or
any other
Security Party; or
|
|
(e)
|
exercise
or assert any combination of the
foregoing.
|
|
28.5
|
Borrower's
required action.
If
during the Security Period, the Lender, by notice to a Borrower,
requires
it to take any action referred to in paragraphs (a)
to
(d)
of
Clause 28.4,
in relation to the other Borrower, that Borrower shall take that
action as
soon as practicable after receiving the Lender's
notice.
|
|
29
|
SUPPLEMENTAL
|
|
29.1
|
Rights
cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to the Lender
are:
|
|
(a)
|
cumulative;
|
|
(b)
|
may
be exercised as often as appears expedient;
and
|
|
(c)
|
shall
not, unless a Finance Document explicitly and specifically states
so, be
taken to exclude or limit any right or remedy conferred by any
law.
|
|
29.2
|
Severability
of provisions.
If
any provision of a Finance Document is or subsequently becomes void,
unenforceable or illegal, that shall not affect the validity,
enforceability or legality of the other provisions of that Finance
Document or of the provisions of any other Finance
Document.
|
|
29.3
|
Counterparts.
A
Finance Document may be executed in any number of
counterparts.
|
|
29.4
|
Third
party rights.
A
person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce or to enjoy
the
benefit of any term of this
Agreement.
|
|
30
|
LAW
AND JURISDICTION
|
|
30.1
|
English
law.
This Agreement shall be governed by, and construed in accordance
with,
English law.
|
|
30.2
|
Exclusive
English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive
jurisdiction to settle any disputes which may arise out of or in
connection with this
Agreement.
|
|
30.3
|
Choice
of forum for the exclusive benefit of the Lender.
Clause 30.2 is for the exclusive benefit of the Lender, which reserves
the
rights:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of
or in
connection with this Agreement in the courts of any country other
than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
|
30.4
|
Process
agent.
Each Borrower irrevocably appoints Marine Legal Services at its registered
office for the time being, presently at Xxxx Xxxxx, 0 Xxxxxxxxxx
Xxxxxx,
Xxxxxx XX0X 0XX, to act as its agent to receive and accept on its
behalf
any process or other document relating to any proceedings in the
English
courts which are connected with this
Agreement.
|
|
30.5
|
Lender's
rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which
the
Lender may have (whether under the law of any country, an international
convention or otherwise) with regard to the bringing of proceedings,
the
service of process, the recognition or enforcement of a judgment
or any
similar or related matter in any
jurisdiction.
|
|
30.6
|
Meaning
of “proceedings”.
In
this Clause 30, “proceedings”
means proceedings of any kind, including an application for a provisional
or protective measure.
|
THIS
AGREEMENT
has been
entered into on the date stated at the beginning of this Agreement.
SCHEDULE
1
DRAWDOWN
NOTICE
|
To:
|
Scotiabank
Europe plc
|
|
00
Xxxxxxxx Xxxxxx
|
|
|
Xxxxxx
XX0X 0XX
|
Attention:
Loans Administration
[l]
DRAWDOWN
NOTICE
|
1
|
We
refer to the loan agreement (the “Loan
Agreement”)
dated [l]
2005 and made between ourselves, as Borrowers, and yourselves, as
Lender,
in connection with a facility of up to US$68,000,000. Terms defined
in the
Loan Agreement have their defined meanings when used in this Drawdown
Notice.
|
|
2
|
We
request to borrow, in connection with the [First][Second] Ship, as
follows:
|
|
(a)
|
Amount
and details of Advance: US$[l].
|
|
(b)
|
Drawdown
Date: [l].
|
|
(c)
|
Duration
of the first Interest Period shall be [l]
months;
|
|
(d)
|
Payment
instructions : account of [l]
and numbered [l]
with [l]
of [l].
|
|
3
|
We
represent and warrant that:
|
|
(a)
|
the
representations and warranties in Clause 9
of
the Loan Agreement would remain true and not misleading if repeated
on the
date of this notice with reference to the circumstances now
existing;
|
|
(b)
|
no
Event of Default or Potential Event of Default has occurred or will
result
from the borrowing of the Advance in
question.
|
|
4
|
This
notice cannot be revoked without the prior consent of the
Lender.
|
.................................................
for
and
on behalf of
[BORROWERS]
SCHEDULE
2
CONDITION
PRECEDENT DOCUMENTS
PART
A
The
following are the documents referred to in Clause 8.1(b).
|
1
|
A
duly executed original of each Finance Document and each Master Agreement
other than those referred to in Part
B.
|
|
2
|
Copies
of the certificate of incorporation and constitutional documents
of each
Borrower and of the Guarantor.
|
|
3
|
Copies
of resolutions of the directors of each Borrower and of the Guarantor
authorising the execution of each of the Finance Documents and
the Master Agreement to
which it is a party.
|
|
4
|
The
original of any power of attorney under which any Finance Document
or a
Master Agreement is executed on behalf of a Borrower or the
Guarantor.
|
|
5
|
Copies
of all consents which either Borrower or any Security Party requires
to
enter into, or make any payment under, any Finance Document, the
Master
Agreements or the MOAs.
|
|
6
|
The
originals of any mandates or other documents required in connection
with
the opening or operation of the Earnings Accounts and the Retention
Accounts.
|
|
7
|
Documentary
evidence that the agent for service of process named in Clause 30
has
accepted its appointment.
|
|
8
|
A
copy of each MOA and each Time
Charter.
|
|
9
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of The Commonwealth of the Bahamas and such other
relevant jurisdictions as the Lender may require.
|
PART
B
The
following are the documents referred to in Clause 8.1(c) (where the “Ship” is
the Ship being financed by the relevant Advance):
|
1
|
A
valuation of the Ship by an independent shipbroker which the Lender
has
approved.
|
|
2
|
A
duly executed original of the Mortgage and of the Deed of Covenant
relating to the Ship (and of each notice of assignment required to
be
delivered under it).
|
|
3
|
Documentary
evidence that:
|
|
(a)
|
the
Ship has been unconditionally delivered by the Time Charterer to,
and
accepted by, the Borrower concerned under the relevant MOA and the
full
purchase price payable under the relevant MOA (in addition to the
part to
be financed by the Advance) has been duly
paid;
|
|
(b)
|
the
Ship is definitively and provisionally registered in the name of
the
Borrower concerned under Bahamas flag at the Port of
Nassau;
|
|
(c)
|
the
Ship is in the absolute and unencumbered ownership of the Borrower
concerned save as contemplated by the Finance
Documents;
|
|
(d)
|
the
Ship maintains the highest class possible with a classification society
which the Lender has approved, free of all overdue recommendations
and
conditions of such classification
society;
|
|
(e)
|
the
relevant Mortgage has been duly registered against the Ship as a
valid
first priority Bahamas ship mortgage in accordance with the laws
of the
Bahamas; and
|
|
(f)
|
the
Ship is insured in accordance with the provisions of this Agreement
and
all requirements therein in respect of insurances have been complied
with.
|
|
4
|
Documents
establishing that the Ship will, as from the relevant Drawdown Date,
be
managed by an Approved Manager on terms acceptable to the Lender,
together
with:
|
|
(a)
|
the
relevant Approved Manager’s Letter of Undertaking;
and
|
|
(b)
|
copies
of the relevant Approved Manager’s Document of Compliance and of the
Ship’s Safety Management Certificate (together with any other details
of
the applicable safety management system which the Lender
requires).
|
|
5
|
A
favourable opinion from an independent insurance consultant acceptable
to
the Lender on such matters relating to the insurances for the Ship
as the
Lender may require.
|
Each
of
the documents specified in paragraphs 2, 3 and 5 of Part A and every other
copy
document delivered under this Schedule shall be certified as a true and up
to
date copy by a director or the secretary (or equivalent officer) of the Borrower
concerned.
EXECUTION
PAGE
|
BORROWERS
|
|
|
SIGNED
by
|
)
|
|
)
|
|
|
for
and on behalf of
|
)
|
|
MC
IBIS SHIPPING LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
SIGNED
by
|
)
|
|
)
|
|
|
for
and on behalf of
|
)
|
|
MC
EID SHIPPING LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
LENDER
|
|
|
SIGNED
by
|
)
|
|
)
|
|
|
for
and on behalf of
|
)
|
|
SCOTIABANK
|
)
|
|
EUROPE
PLC
|
)
|
|
in
the presence of:
|
)
|
March
30,
2005
as
Guarantor
-
and
-
SCOTIABANK
EUROPE PLC
as
Lender
GUARANTEE
relating
to a Loan Agreement
dated
March 30, 2005
INDEX
|
Clause
|
Page
|
||
|
1
|
INTERPRETATION
|
1
|
|
|
2
|
GUARANTEE
|
2
|
|
|
3
|
LIABILITY
AS PRINCIPAL AND INDEPENDENT DEBTOR
|
3
|
|
|
|
|||
|
4
|
EXPENSES
|
3
|
|
|
5
|
ADJUSTMENT
OF TRANSACTIONS
|
3
|
|
|
6
|
PAYMENTS
|
4
|
|
|
7
|
INTEREST
|
4
|
|
|
8
|
SUBORDINATION
|
4
|
|
|
9
|
ENFORCEMENT
|
5
|
|
|
10
|
REPRESENTATIONS
AND WARRANTIES
|
5
|
|
|
11
|
UNDERTAKINGS
|
6
|
|
|
12
|
JUDGMENTS
AND CURRENCY INDEMNITY
|
8
|
|
|
13
|
SET
OFF
|
8
|
|
|
14
|
SUPPLEMENTAL
|
8
|
|
|
15
|
ASSIGNMENT
|
9
|
|
|
|
|||
|
16
|
NOTICES
|
9
|
|
|
17
|
INVALIDITY
OF LOAN AGREEMENT
|
10
|
|
|
18
|
GOVERNING
LAW AND JURISDICTION
|
10
|
|
|
EXECUTION
PAGE
|
12
|
||
THIS
GUARANTEE
is made
on March 30, 2005
BETWEEN
|
(1)
|
MC
SHIPPING INC.,
a
corporation incorporated in the Republic of Liberia whose registered
office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the “Guarantor”);
and
|
|
(2)
|
SCOTIABANK
EUROPE PLC,
acting through its office at Scotia House, 00 Xxxxxxxx Xxxxxx, Xxxxxx
XX0X
0XX, Xxxxxxx, (the “Lender”,
which expression includes its successors and
assigns).
|
BACKGROUND
|
(A)
|
By
a loan agreement dated March 30, 2005 and made between (i) MC Ibis
Shipping Limited and MC Eid Shipping Limited, as joint and several
borrowers (the “Borrowers”)
and (ii) the Lender as lender it was agreed that the Lender would
make
available to the Borrowers a facility of up to US$68,000,000.
|
|
(B)
|
By
a master agreement (the “Advance
A Master Agreement”)
dated March 30, 2005 and made between (i) MC Ibis Shipping Limited
and
(ii) the Lender, it was agreed that the Lender might enter into
Transactions with MC Ibis Shipping Limited from time to time to hedge
the
Borrowers’ exposure under the Loan Agreement to interest rate
fluctuations.
|
|
(C)
|
By
a master agreement (the “Advance
B Master Agreement”
and, together with the Advance A Master Agreement, the “Master
Agreements”)
dated March 30, 2005 and made between (i) MC Eid Shipping Limited
and (ii)
the Lender, it was agreed that the Lender might enter into Transactions
with MC Eid Shipping Limited from time to time to hedge the Borrowers’
exposure under the Loan Agreement to interest rate
fluctuations.
|
|
(D)
|
The
execution and delivery to the Lender of this Guarantee is one of
the
conditions precedent to the availability of the facility under the
Loan
Agreement
and to the Lender entering into any Transactions with either Borrower
under either Master Agreement.
|
IT
IS AGREED
as
follows:
|
31
|
INTERPRETATION
|
|
31.1
|
Defined
expressions.
Words and expressions defined in the Loan Agreement shall have the
same
meanings when used in this Guarantee unless the context otherwise
requires.
|
|
31.2
|
Construction
of certain terms.
In
this Guarantee:
|
“bankruptcy”
includes a liquidation, receivership or administration and any form of
suspension of payments, arrangement with creditors or reorganisation under
any
corporate or insolvency law of any country;
“EBITDA”
means,
at any date of determination under this Guarantee, charterhire and other income
of the Guarantor and its subsidiaries for the 12-month period ending on that
date:
|
(a)
|
less
the sum for the relevant 12-month period, without duplication,
of:
|
|
(i)
|
commission
on charterhire;
|
|
(ii)
|
vessel
operating expenses; and
|
|
(iii)
|
general
and administrative expenses;
|
|
(b)
|
plus
interest income for the relevant 12-month
period;
|
all
determined on a consolidated basis in accordance with GAAP and as shown in
the
consolidated statement of income in the Latest Financial
Statements;
“GAAP”
means
auditing standards generally accepted in the United States of
America;
“Interest
Cover”
means,
at any date of determination under this Guarantee, the ratio of EBITDA for
the
12-month period ending on that date to Interest Expense for the 12-month period
ending on that date;
“Interest
Expense”
means,
at any date of determination under the Guarantee, interest expense of the
Guarantor and its subsidiaries for the 12-month period ending on that date
determined on a consolidated basis in accordance with GAAP and as shown in
the
consolidated statement of income in the Latest Financial
Statements;
“Latest
Financial Statements”
means,
at any date, the latest audited annual consolidated financial statements or
interim consolidated financial statements of the Guarantor and its subsidiaries
delivered to the Lender pursuant to Clause 11.3 and/or made publicly
available;
“Liquidity”
means,
at any date of determination under this Guarantee, cash and cash equivalents
of
the Guarantor and its subsidiaries determined on a consolidated basis in
accordance with GAAP and as shown in the consolidated balance sheet in the
Latest Financial Statements;
“Loan
Agreement”
means
the loan agreement dated March 30, 2005 referred to in Recital (A) and includes
any existing or future amendments or supplements, whether made with the
Guarantor's consent or otherwise;
“Master
Agreements”
means
the master agreements each dated March 30, 2005 referred to in Recitals (B)
and
(C) and includes any existing or future amendments or supplements, whether
made
with the Guarantor’s consent or otherwise and also includes any Transactions
from time to time entered into and Confirmations exchanged under those master
agreements;
“Net
Income”
means,
at any date of determination under this Guarantee, the net income of the
Guarantor and its subsidiaries for the 12-month period ending on that date
determined on a consolidated basis in accordance with GAAP and as shown in
the
consolidated statement of income in the Latest Financial Statements;
and
“Tangible
Net Worth”
means,
at any date of determination under this Guarantee, the value of total
shareholders’ equity of the Guarantor and its subsidiaries determined on a
consolidated basis in accordance with GAAP and as shown in the consolidated
balance sheet in the Latest Financial Statements.
|
31.3
|
Application
of construction and interpretation provisions of Loan
Agreement.
Clause 1.2 to 1.5 of the Loan Agreement apply, with any necessary
modifications, to this Guarantee.
|
|
32
|
GUARANTEE
|
|
32.1
|
Guarantee
and indemnity.
The Guarantor unconditionally and
irrevocably:
|
|
(a)
|
guarantees
the due payment of all amounts payable by the Borrowers or either
of them
under or in connection with the Commitment Letter, the Loan Agreement,
every other Finance Document and the Master
Agreements;
|
2
|
(b)
|
undertakes
to pay to the Lender, on the Lender's demand, any such amount which
is not
paid by the Borrowers or either of them when payable;
and
|
|
(c)
|
fully
indemnifies the Lender on its demand in respect of all claims, expenses,
liabilities and losses which are made or brought against or incurred
by
the Lender as a result of or in connection with any obligation or
liability guaranteed by the Guarantor being or becoming unenforceable,
invalid, void or illegal; and the amount recoverable under this indemnity
shall be equal to the amount which the Lender would otherwise have
been
entitled to recover.
|
|
32.2
|
No
limit on number of demands.
The Lender may serve more than 1 demand under Clause 2.1.
|
|
33
|
LIABILITY
AS PRINCIPAL AND INDEPENDENT
DEBTOR
|
|
33.1
|
Principal
and independent debtor.
The Guarantor shall be liable under this Guarantee as a principal
and
independent debtor and accordingly it shall not have, as regards
this
Guarantee, any of the rights or defences of a
surety.
|
|
33.2
|
Waiver
of rights and defences.
Without limiting the generality of Clause 3.1,
the Guarantor shall neither be discharged by, nor have any claim
against
the Lender in respect of:
|
|
(a)
|
any
amendment or supplement being made to any of the Finance Documents
or
either of the Master Agreements;
|
|
(b)
|
any
arrangement or concession (including a rescheduling or acceptance
of
partial payments) relating to, or affecting, any of the Finance Documents
or either of the Master Agreements;
|
|
(c)
|
any
release or loss (even though negligent) of any right or Security
Interest
created by any of the Finance Documents or either of the Master
Agreements;
|
|
(d)
|
any
failure by the Lender (even though negligent) promptly or properly
to
exercise or enforce any such right or Security Interest, including
a
failure to realise for its full market value an asset covered by
such a
Security Interest; or
|
|
(e)
|
any
other Finance Document or either Master Agreement or any Security
Interest
now being or later becoming void, unenforceable, illegal or invalid
or
otherwise defective for any reason, including a neglect to register
it.
|
|
34
|
EXPENSES
|
|
34.1
|
Costs
of preservation of rights, enforcement etc.
The Guarantor shall pay to the Lender on its demand the amount
of all
expenses incurred by the Lender (including legal expenses actually
incurred) in connection with any matter arising out of this Guarantee
or
any Security Interest connected with it, including any advice,
claim or
proceedings relating to this Guarantee or such a Security
Interest.
|
|
34.2
|
Fees
and expenses payable under Loan Agreement.
Clause 4.1
is
without prejudice to the Guarantor’s liabilities in respect of the
Borrowers’ obligations under clause 19 of the Loan Agreement (Fees and
Expenses) and under similar provisions of the other Finance
Documents.
|
|
35
|
ADJUSTMENT
OF TRANSACTIONS
|
3
|
35.1
|
Reinstatement
of obligation to pay.
The Guarantor shall pay to the Lender on its demand any amount which
the
Lender is required, or agrees, to pay pursuant to any claim by, or
settlement with, a trustee in bankruptcy of either Borrower or of
another
Security Party (or similar person) on the ground that the Loan Agreements
or either Master Agreement or a payment by the Borrowers or either
of them
or by another Security Party, was invalid or on any similar
ground.
|
|
36
|
PAYMENTS
|
|
36.1
|
Method
of payments.
Any amount due under this Guarantee shall be
paid:
|
|
(a)
|
in
immediately available funds;
|
|
(b)
|
to
such account as the Lender may from time to time notify to the
Guarantor;
|
|
(c)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(d)
|
free
and clear of any tax deduction except a tax deduction which the Guarantor
is required by law to make.
|
|
36.2
|
Grossing-up
for taxes.
If
the Guarantor is required by law to make a tax deduction, the amount
due
to the Lender shall be increased by the amount necessary to ensure
that
the Lender receives and retains a net amount which, after the tax
deduction, is equal to the full amount that it would otherwise have
received.
|
|
37
|
INTEREST
|
|
37.1
|
Accrual
of interest.
Any amount due under this Guarantee shall carry interest after the
third
Business Day following the date on which the Lender demands payment
of it
until it is actually paid, unless interest on that same amount also
accrues under the Loan Agreement or a Master
Agreement.
|
|
37.2
|
Calculation
of interest.
Interest under this Guarantee shall be calculated and accrue in the
same
way as interest under clause 6 of the Loan
Agreement.
|
|
37.3
|
Guarantee
extends to interest payable under Loan Agreement.
For the avoidance of doubt, it is confirmed that this Guarantee covers
all
interest payable under the Loan Agreement (including that payable
under
clause 6 of the Loan Agreement).
|
|
38
|
SUBORDINATION
|
|
38.1
|
Subordination
of rights of Guarantor.
All rights which the Guarantor at any time has (whether in respect
of this
Guarantee or any other transaction) against the Borrowers or either
of
them or any Security Party or their respective assets shall be fully
subordinated to the rights of the Lender under the Finance Documents;
and,
in particular, the Guarantor shall
not:
|
|
(a)
|
claim,
or in a bankruptcy of either Borrower or any Security Party prove
for, any
amount payable to the Guarantor by either Borrower or any Security
Party,
whether in respect of this Guarantee or any other
transaction;
|
|
(b)
|
take
or enforce any Security Interest for any such
amount;
|
|
(c)
|
claim
to set-off any such amount against any amount payable by the Guarantor
to
the Borrowers or either of them or any Security Party;
or
|
|
(d)
|
claim
any subrogation or other right in respect of any Finance Document
or
either Master Agreement or any sum received or recovered by the Lender
under a Finance Document or a Master
Agreement.
|
4
|
39
|
ENFORCEMENT
|
|
39.1
|
No
requirement to commence proceedings against Borrower.
The Lender will not need to commence any proceedings under, or enforce
any
Security Interest created by, the Loan Agreement or any other Finance
Document or either Master Agreement before claiming or commencing
proceedings under this Guarantee.
|
|
39.2
|
Conclusive
evidence of certain matters.
However, as against the Guarantor:
|
|
(a)
|
any
judgment or order of a court in England or any other Pertinent
Jurisdiction in connection with the Loan Agreement or either Master
Agreement; and
|
|
(b)
|
any
statement or admission of the Borrowers or either of them in connection
with the Loan Agreement or either Master
Agreement,
|
shall
be
binding and conclusive as to all matters of fact and law to which it
relates.
|
39.3
|
Suspense
account.
The Lender may, for the purpose of claiming or proving in a bankruptcy
of
a Borrower or any Security Party, place any sum received or recovered
under or by virtue of this Guarantee or any Security Interest connected
with it on a separate suspense or other nominal account without applying
it in satisfaction of the Borrower's obligations under the Loan Agreement
and/or the Master Agreements.
|
|
40
|
REPRESENTATIONS
AND WARRANTIES
|
|
40.1
|
General.
The Guarantor represents and warrants to the Lender as
follows.
|
|
40.2
|
Status.
The Guarantor is duly incorporated and validly existing and in good
standing under the laws of the Republic of
Liberia.
|
|
40.3
|
Corporate
power.
The Guarantor has the corporate capacity, and has taken all corporate
action and obtained all consents necessary for
it:
|
|
(a)
|
to
execute this Guarantee; and
|
|
(b)
|
to
make all the payments contemplated by, and to comply with, this
Guarantee.
|
|
40.4
|
Consents
in force.
All the consents referred to in Clause 10.3
remain in force and nothing has occurred which makes any of them
liable to
revocation.
|
|
40.5
|
Legal
validity.
This Guarantee constitutes the Guarantor’s legal, valid and binding
obligations enforceable against the Guarantor in accordance with
its terms
and such obligations will rank at least pari
passu
with all its other present and future unsecured and unsubordinated
obligations subject to any relevant insolvency laws affecting creditors'
rights generally.
|
|
40.6
|
No
conflicts.
The execution by the Guarantor of this Guarantee and its compliance
with
this Guarantee will not involve or lead to a contravention
of:
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of the Guarantor;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on
the
Guarantor or any of its assets.
|
5
|
40.7
|
No
withholding taxes.
All payments which the Guarantor is liable to make under this Guarantee
may be made without deduction or withholding for or on account of
any tax
payable under any law of any Pertinent
Jurisdiction.
|
|
40.8
|
No
default.
To
the knowledge of the Guarantor, no Event of Default or Potential
Event of
Default has occurred and is
continuing.
|
|
40.9
|
Information.
All information which has been provided in writing by or on behalf
of the
Guarantor to the Lender in connection with any Finance Document satisfied
the requirements of Clause 11.2;
all audited and unaudited financial statements which have been so
provided
satisfied the requirements of Clause 11.4;
and there has been no material adverse change in the financial position
or
state of affairs of the Guarantor from that disclosed in the latest
of
those financial statements.
|
|
40.10
|
No
litigation.
No
legal or administrative action involving the Guarantor has been commenced
or taken or, to the Guarantor’s knowledge, is likely to be commenced or
taken which, in either case, would be likely to have a material adverse
effect on the Guarantor's financial position or state of
affairs.
|
|
41
|
UNDERTAKINGS
|
|
41.1
|
General.
The Guarantor undertakes with the Lender to comply with the following
provisions of this Clause 11
at
all times during the Security Period, except as the Lender may otherwise
permit.
|
|
41.2
|
Information
provided to be accurate.
All financial and other information which is provided in writing
by or on
behalf of the Guarantor under or in connection with this Guarantee
will be
true and not misleading and will not omit any material fact or
consideration.
|
|
41.3
|
Provision
of financial statements.
The Guarantor will send to the
Lender:
|
|
(a)
|
as
soon as possible, but in no event later than 3 months after the end
of
each financial year of the Guarantor, the audited consolidated financial
statements of the Guarantor and its subsidiaries containing (among
other
things) a consolidated balance sheet, a consolidated statement of
income,
a consolidated statement of cash flows and a consolidated statement
of
shareholders’ equity;
|
|
(b)
|
as
soon as possible, but in no event later than 2 months after the end
of
each quarter in each financial year of the Guarantor unaudited
consolidated financial statements of the Guarantor and its subsidiaries
certified as to their correctness by an authorised representative
of the
Guarantor;
|
|
(c)
|
together
with each set of financial statements, a certificate signed by the
chief
financial officer of the Guarantor (in such form as the Lender may
require) certifying that the Guarantor is in compliance with the
provisions of Clause 11.13; and
|
|
(d)
|
from
time to time, and on demand, such additional financial or other
information relating to the Guarantor or to any of its subsidiaries
as may
reasonably be requested by the
Lender.
|
|
41.4
|
Form
of financial statements.
All financial statements (audited and unaudited) delivered under
Clause
11.3
will:
|
|
(a)
|
be
prepared in accordance with all applicable laws and GAAP consistently
applied;
|
|
(b)
|
present
fairly in all material respects the consolidated financial position
of the
Guarantor and its subsidiaries at the date of those financial statements
and the consolidated results of their operations and cash flows for
the
period to which those financial statements relate;
and
|
6
|
(c)
|
be
free of material misstatement and fully disclose or provide for all
significant liabilities of the Guarantor and of each of its
subsidiaries.
|
|
41.5
|
Shareholder
and creditor notices.
The Guarantor will send the Lender, at the same time as they are
despatched, copies of all communications which are despatched to
the
Guarantor's shareholders or creditors or any class of
them.
|
|
41.6
|
Consents.
The Guarantor will maintain in force and promptly obtain or renew,
and
will promptly send certified copies to the Lender of, all consents
required:
|
|
(a)
|
for
the Guarantor to perform its obligations under this
Guarantee;
|
|
(b)
|
for
the validity or enforceability of this
Guarantee;
|
and
the
Guarantor will comply with the terms of all such consents.
|
41.7
|
Notification
of litigation.
The Guarantor will provide the Lender with details of any legal or
administrative action involving the Guarantor as soon as such action
is
instituted or it becomes apparent to the Guarantor that it is likely
to be
instituted, unless it is clear that the legal or administrative action
cannot be considered material in the context of this
Guarantee.
|
|
41.8
|
Notification
of default.
The Guarantor will notify the Lender as soon as the Guarantor becomes
aware of:
|
|
(a)
|
the
occurrence of an Event of Default or Potential Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default may have
occurred;
|
and
will
thereafter keep the Lender fully up-to-date with all developments.
|
41.9
|
Maintenance
of status.
The Guarantor will maintain its separate corporate existence and
remain in
good standing under the laws of the Republic of
Liberia.
|
|
41.10
|
No
change of business.
The Guarantor will not, and shall procure that none of its subsidiaries
will, make any material change to the nature of its business from
that
existing at the date of this
Guarantee.
|
|
41.11
|
No
merger etc.
The Guarantor shall not, and shall procure that neither Borrower
shall,
enter into any form of merger, sub-division or amalgamation unless,
in the
case of the Guarantor:
|
|
(a)
|
it
is the surviving entity;
|
|
(b)
|
clause
7.7(c) of the Loan Agreement would not then apply;
and
|
|
(c)
|
Tangible
Net Worth of the surviving entity is equal to or greater than that
of the
Guarantor.
|
|
41.12
|
Maintenance
of ownership of Borrowers.
The Guarantor shall remain the direct or indirect beneficial owner
of the
whole of the issued share capital of each Borrower, free from any
Security
Interest, at all times during the Security
Period.
|
7
|
41.13
|
Financial
covenants.
The Guarantor shall ensure that the consolidated financial position
of the
Guarantor and its subsidiaries (tested quarterly as at 31 March,
30 June,
30 September and 31 December against each set of Latest Financial
Statements) shall be such that:
|
|
(a)
|
Tangible
Net Worth shall be not less than $25,000,000
plus:
|
|
(i)
|
50
per cent. of cumulative Net Income for the period commencing on 1
January
2005 and ending on the date of determination of Tangible Net Worth;
and
|
|
(ii)
|
the
paid up value of any shares in the Guarantor issued after the date
of this
Guarantee;
|
|
(b)
|
Interest
Cover shall be not less than 2:1;
and
|
|
(c)
|
Liquidity
shall be not less than $5,000,000.
|
|
42
|
JUDGMENTS
AND CURRENCY
INDEMNITY
|
|
42.1
|
Judgments
relating to Loan Agreement and/or Master Agreements.
This Guarantee shall cover any amount payable by the Borrower under
or in
connection with any judgment relating to the Loan Agreement and/or
either
Master Agreement.
|
|
42.2
|
Currency
indemnity.
In
addition, clause 20.4 (Currency Indemnity) of the Loan Agreement
shall
apply, with any necessary adaptations, in relation to this
Guarantee.
|
|
43
|
SET-OFF
|
|
43.1
|
Application
of credit balances.
Following the occurrence of and during the continuation of an Event
of
Default, the Lender may without prior
notice:
|
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to
the
credit of any account in the name of the Guarantor at any office
in any
country of the Lender in or towards satisfaction of any sum then
due from
the Guarantor to the Lender under this Guarantee;
and
|
|
(b)
|
for
that purpose:
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of the
Guarantor;
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance
into
Dollars;
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Lender considers appropriate.
|
|
43.2
|
Existing
rights unaffected.
The Lender shall not be obliged to exercise any of its rights under
Clause
13.1;
and those rights shall be without prejudice and in addition to any
right
of set-off, combination of accounts, charge, lien or other right
or remedy
to which the Lender is entitled (whether under the general law or
any
document).
|
|
43.3
|
No
Security Interest.
This Clause 13 gives the Lender a contractual right of set-off only,
and
does not create any equitable charge or other Security Interest over
any
credit balance of the Guarantor.
|
|
44
|
SUPPLEMENTAL
|
|
44.1
|
Continuing
guarantee.
This Guarantee shall remain in force as a continuing security at
all times
during the Security Period.
|
8
|
44.2
|
Rights
cumulative, non-exclusive.
The Lender’s rights under and in connection with this Guarantee are
cumulative, may be exercised as often as appears expedient and shall
not
be taken to exclude or limit any right or remedy conferred by
law.
|
|
44.3
|
No
impairment of rights under Guarantee.
If
the Lender omits to exercise, delays in exercising or invalidly exercises
any of its rights under this Guarantee, that shall not impair that
or any
other right of the Lender under this
Guarantee.
|
|
44.4
|
Severability
of provisions.
If
any provision of this Guarantee is or subsequently becomes void,
illegal,
unenforceable or otherwise invalid, that shall not affect the validity,
legality or enforceability of its other
provisions.
|
|
44.5
|
Guarantee
not affected by other security.
This Guarantee shall not impair, nor be impaired by, any other guarantee,
any Security Interest or any right of set-off or netting or to combine
accounts which the Lender may now or later hold in connection with
the
Loan Agreement or either Master
Agreement.
|
|
44.6
|
Guarantor
bound by Loan Agreement and Master Agreements.
The Guarantor agrees with the Lender to be bound by all provisions
of the
Loan Agreement and the Master Agreements which are applicable to
the
Security Parties in the same way as if those provisions had been
set out
(with any necessary modifications) in this Guarantee and confirms
that it
is fully familiar with the terms of the Loan Agreement and the other
Finance Documents and the Master
Agreements.
|
|
44.7
|
Applicability
of provisions of Guarantee to other Security
Interests.
Any Security Interest which the Guarantor creates (whether at the
time at
which it signs this Guarantee or at any later time) to secure any
liability under this Guarantee shall be a principal and independent
security, and Clauses 3
and 17
shall, with any necessary modifications, apply to it, notwithstanding
that
the document creating the Security Interest neither describes it
as a
principal or independent security nor includes provisions similar
to
Clauses 3
and 17.
|
|
44.8
|
Applicability
of provisions of Guarantee to other rights.
Clauses 3
and 17
shall also apply to any right of set-off or netting or to combine
accounts
which the Guarantor creates by an agreement entered into at the time
of
this Guarantee or at any later time (notwithstanding that the agreement
does not include provisions similar to Clauses 3
and 17),
being an agreement referring to this
Guarantee.
|
|
44.9
|
Third
party rights.
A
person who is not a party to this Guarantee has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce or to enjoy
the
benefit of any term of this
Guarantee.
|
|
45
|
ASSIGNMENT
|
|
45.1
|
Assignment
by Lender.
The Lender may assign its rights under and in connection with this
Guarantee to the same extent as it may assign its rights under the
Loan
Agreement.
|
|
46
|
NOTICES
|
|
46.1
|
Notices
to Guarantor.
Any notice or demand to the Guarantor under or in connection with
this
Guarantee shall be given by letter or
fax:
|
00
Xxxxxx
xx Xxxxxxxxxxx
XX
Xxx
000
Xxxxxx
Attention:
Xxxxxxxxx Xxxxxxx
9
Fax
No:
(00) 0 00 00 00 00
or
to
such other address which the Guarantor may notify to the Lender.
|
46.2
|
Application
of certain provisions of Loan Agreement.
Clauses 27.3, 27.4 and 27.5 of the Loan Agreement apply to any notice
or
demand under or in connection with this
Guarantee.
|
|
46.3
|
Validity
of demands.
A
demand under this Guarantee shall be valid notwithstanding that it
is
served:
|
|
(a)
|
on
the date on which the amount to which it relates is payable by the
Borrower under the Loan Agreement or the relevant Master Agreement
(as the
case may be);
|
|
(b)
|
at
the same time as the service of a notice under clause 18.2 (Events
of
Default) of the Loan Agreement;
|
and
a
demand under this Guarantee may refer to all amounts payable under or in
connection with the Loan Agreement and/or the
Master Agreements (or either of them)
without
specifying a particular sum or aggregate sum.
|
46.4
|
Notices
to Lender.
Any notice to the Lender under or in connection with this Guarantee
shall
be sent to the same address and in the same manner as notices to
the
Lender under the Loan Agreement.
|
|
47
|
INVALIDITY
OF LOAN AGREEMENT
|
|
47.1
|
Invalidity
of Loan Agreement.
In
the event of:
|
|
(a)
|
the
Loan Agreement now being or later becoming, with immediate or
retrospective effect, void, illegal, unenforceable or otherwise invalid
for any other reason whatsoever, whether of a similar kind or not;
or
|
|
(b)
|
without
limiting the scope of paragraph (a), a bankruptcy of a Borrower,
the
introduction of any law or any other matter resulting in a Borrower
being
discharged from liability under the Loan Agreement, or the Loan Agreement
ceasing to operate (for example, by interest ceasing to
accrue);
|
this
Guarantee shall cover any amount which would have been or become payable under
or in connection with the Loan Agreement if the Loan Agreement had been and
remained entirely valid, legal and enforceable, or the Borrower concerned had
not suffered bankruptcy, or any combination of such events or circumstances,
as
the case may be, and the Borrower concerned had remained fully liable under
it
for liabilities whether invalidly incurred or validly incurred but subsequently
retrospectively invalidated; and references in this Guarantee to amounts payable
by the Borrower concerned under or in connection with the Loan Agreement shall
include references to any amount which would have so been or become payable
as
aforesaid.
|
47.2
|
Invalidity
of other Finance Documents and Master Agreements.
Clause 17.1
also applies to each of the other Finance Documents to which the
Borrower
is a party and to the Master
Agreement.
|
|
48
|
GOVERNING
LAW AND JURISDICTION
|
|
48.1
|
English
law.
This Guarantee shall be governed by, and construed in accordance
with,
English law.
|
10
|
48.2
|
Exclusive
English jurisdiction.
Subject to Clause 18.3,
the courts of England shall have exclusive jurisdiction to settle
any
disputes which may arise out of or in connection with this
Guarantee.
|
|
48.3
|
Choice
of forum for the exclusive benefit of the Lender.
Clause 18.2
is
for the exclusive benefit of the Lender, which reserves the
rights:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of
or in
connection with this Guarantee in the courts of any country other
than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
The
Guarantor shall not commence any proceedings in any country other than England
in relation to a matter which arises out of or in connection with this
Guarantee.
|
48.4
|
Process
agent.
The Guarantor irrevocably appoints Marine Legal Services at its registered
office for the time being, presently at Xxxx Xxxxx, 0 Xxxxxxxxxx
Xxxxxx,
Xxxxxx XX0X 0XX, to act as its agent to receive and accept on its
behalf
any process or other document relating to any proceedings in the
English
courts which are connected with this
Guarantee.
|
|
48.5
|
Lender’s
rights unaffected.
Nothing in this Clause 18
shall exclude or limit any right which the Lender may have (whether
under
the law of any country, an international convention or otherwise)
with
regard to the bringing of proceedings, the service of process, the
recognition or enforcement of a judgment or any similar or related
matter
in any jurisdiction.
|
|
48.6
|
Meaning
of “proceedings”.
In
this Clause 18,
“proceedings”
means proceedings of any kind, including an application for a provisional
or protective measure.
|
THIS
GUARANTEE
has been
entered into as a deed on the date stated at the beginning of this
Guarantee.
11
EXECUTION
PAGE
|
GUARANTOR
|
|
|
EXECUTED
as
a DEED
by
|
)
|
|
)
|
|
|
by
|
)
|
|
its
duly authorised attorney
|
)
|
|
in
the presence of:
|
)
|
|
LENDER
|
|
|
EXECUTED
AS A DEED
|
)
|
|
by
SCOTIABANK
EUROPE PLC
|
)
|
|
by
|
)
|
|
its
duly authorised attorney
|
)
|
|
in
the presence of:
|
)
|
12
